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| Thursday, 06 January 2005 |
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World's major powers close to debt moratorium for tsunami region PARIS, Wednesday (AFP) The world's major industrialised countries and the Paris Club of creditor nations moved closer to freezing the debt of countries ravaged by last week's Indian Ocean tsunami disaster. Britain, with the backing of the United States, and Italy joined growing calls in Europe for at least a moratorium on the annual debt payments of many of the almost a dozen countries battered by raging waters on December 26. Britain's finance minister, Gordon Brown, said London would propose to the Group of Eight nations, which it currently chairs, to suspend immediately about three billion dollars (2.2 billion euros) owed by the hardest-hit nations. Italy went further, with Foreign Minister Gianfranco Fini announcing plans to cancel, rather than freeze, or convert debt owed by the countries, where almost 150,000 people have been killed in one of the worst disasters in living memory. French Finance Minister Herve Gaymard meanwhile said France was lobbying other G8 members and that the Paris Club would discuss the particularly badly affected cases of Indonesia and Sri Lanka at a meeting on January 12. The new impetus behind the idea comes after Germany and Canada announced last week that they were looking at debt reduction, while the United States made favourable comments, if not financial commitments beyond aid donations. More momentum for the plans could be gathered at an international conference in Jakarta on Thursday, and a meeting of European Union aid, health and foreign ministers in Brussels on Friday. It was not immediately clear whether the freeze would involve a halt on debt interest payments - simply postponing them until a later date - or a real stop on the debt itself. "What we are suggesting is an immediate moratorium on debt repayments from the afflicted countries," or about three billion dollars in repayments annually from the hardest hit countries, Brown told BBC radio. "That would then lead to an analysis of the debt needs of these countries with the possibility of some write-off of debt, and at the same time ensure that the money goes to the areas and people in greatest need in these countries," he said. Brown said the debt repayment freeze would be followed by other steps and that the International Monetary Fund would also offer emergency assistance that could be worth a billion dollars. |
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