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Jun 1 08 2:34 PM

Iraq to Receive Debt Forgiveness




Germany's finance minister said Saturday that he and the U.S. Treasury Secretary (search) have reached an agreement under which Iraq's creditors would write off up to 80 percent of Iraq's debt, capping a months-long U.S. push for debt forgiveness.

Finance Minister Hans Eichel (search) said a meeting with Treasury Secretary John Snow "created the basis on which the forgiveness of Iraqi debt can be settled mutually in the Paris Club (search)" of creditor nations, which is owed about $42 billion by Iraq.

"We agreed that there should be a write-off of debts in several stages amounting to 80 percent in total," Eichel told reporters on the sidelines of a meeting of ministers from the Group of 20 major economies.

"Within this framework, the necessary decisions can now be taken in the Paris Club," Eichel said. He did not elaborate and took no questions.

The German-U.S. agreement was being discussed Saturday by the Paris Club and "our expectation is that it will be accepted," said Eichel's spokesman, Joerg Mueller.

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