Print

Email story

Comment

Letter to the editor

Deal paves way for poor nations' debt settlement

LONDON - Britain and the United States have overcome their differences on debt relief, setting the stage Friday for a potentially historic agreement among G8 countries to cancel $15-billion owed by the poorest countries.

The proposal, negotiated this week in Washington by President Bush and British Prime Minister Tony Blair, followed a concession from the White House that money used to cancel debts must not come out of future aid, British officials said Friday.

London and Washington want the Group of Eight industrialized nations to cancel 100 percent of the debt that poor countries owe multilateral institutions such as the World Bank, the International Monetary Fund and the African Development Bank.

The agreement, discussed at a meeting of G8 finance ministers in London on Friday, initially would cover 18 nations eligible for debt relief under the Heavily Indebted Poor Countries initiative, including Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana and Mali.

Another nine countries are close to completing the targets for good governance set out under the initiative and would then qualify. Some 38 countries in total are participating in the program.

Britain's finance minister said he is optimistic that G8 nations will back the proposal.

"Much is still to be done, but I think there is a will to do this in a way that would see the biggest debt settlement the world has ever seen," said Gordon Brown, chancellor of the exchequer.

The deal was to be put to finance ministers from Russia, Canada, Japan, France, Germany and Italy over dinner Friday and in further talks today.

[Last modified June 11, 2005, 00:26:12]