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| Saturday, 01 January 2005 |
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Canada gives debt moratorium to tsunami nations VANCOUVER, British Columbia, Friday (Reuters) Canada announced a debt payment moratorium for countries struck by the Indian Ocean tsunami, and said it would speak with other creditor nations about offering relief. Foreign Minister Pierre Pettigrew told reporters in Ottawa that the moratorium would help the battered Asian nations deal with both the immediate crisis and their long-term rebuilding efforts. Canada joined European appeals that the Paris Club of 19 creditor nations discuss the debt issue when the group holds its scheduled meeting on Jan. 12. "We are already announcing that we will put in place immediately a debt moratorium, and for the foreseeable future. We hope that the Paris Club colleagues will do the same thing," Pettigrew said. Pettigrew said the government-to-government debt was not being eliminated and the moratorium on payments would be in place while the countries rebuild. According to Finance Canada, Ottawa is owed C$588 million ($488 million) by Indonesia, C$99 million by Sri Lanka, C$32.8 million by Thailand, C$237 million by India and smaller amounts by other countries in the region. Pettigrew said he had also talked with Britain, which takes over leadership of the Group of Eight rich nations next week, to discuss how that organization should respond to the catastrophe. Meanwhile Italy called on Group of Eight rich nations on Thursday to discuss a joint response to the Indian Ocean tsunami catastrophe as moves to grant debt relief to some of the stricken countries gathered pace. With the death toll from Sunday's disaster soaring past 125,000, France and Germany led European appeals for debt relief and the Paris Club of creditor nations prepared to discuss a moratorium on debt owed by the worst affected countries. Italian Prime Minster Silvio Berlusconi wanted a G8 meeting on aid and debt relief for victims of the giant waves, triggered by a huge earthquake, that flattened villages and resorts in what he called "the worst cataclysm of the modern era". "I want to propose an extraordinary G8 meeting," Berlusconi told reporters after a news conference. "The meeting should discuss the organisation of aid and the possible reduction of debt." Berlusconi said he intended to talk to the other members of the G8 - the United States, Russia, Britain, Canada, France, Japan, Germany - and call British Prime Minister Tony Blair later on Thursday. Britain takes over the G8 presidency this week. Meanwhile the Paris Club group of creditors is to examine a debt moratorium for countries hit by Asia's tsunami, a source close to the Club said on Thursday. Analysts estimate the economic cost of the disaster at about $14 billion. Some are cutting economic growth estimates for the hardest-hit countries. "We are going to examine the situation of the countries affected by the tsunami; in particular, all the countries of the region - Indonesia, Sri Lanka, Malaysia, Myanmar, Thailand and so forth," a source close to the Paris Club said. The source said a proposal for a moratorium would be discussed at the Club's next meeting on Jan. 12. With France and Germany in favour, a moratorium will depend largely on the United States and Japan, which is in many cases the main creditor of the countries concerned, the source said. Germany has already said it will propose a debt moratorium for Indonesia and Somalia. On Wednesday, U.S. President George Bush said he was open to all requests for aid, including Germany's plan. French President Jacques Chirac asked Prime Minister Jean-Pierre Raffarin to support plans for a moratorium, but did not say which countries should benefit. Belgian Prime Minister Guy Verhofstadt said he favoured cancelling debts owed by the hardest-hit countries. A moratorium will mean little to countries such as Somalia and Myanmar, which stopped paying their debts to the Paris Club years ago. But other countries stand to gain substantially. Indonesia, which suffered the worst devastation, owes the Paris Club about $40 billion and is the largest debtor in the disaster zone, according to the World Bank. "It is very positive," said Indonesian Finance Minister Jusuf Anwar. "We will follow it up. We will give our response." The Paris Club will collect data from lenders to establish the total amount owed by the countries concerned. |
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