G8 Backs Russia's Early Repayment Of Debt To Paris Club - Kudrin
MOSCOW Feb 13 INTERFAX - All G8 finance ministers, including the German minister, supported Russia's plans to pay off its debt to the Paris Club of creditor-nations ahead of schedule, Russian Finance Minister Alexei Kudrin told journalists.

Repayment on 2005 terms?

The first step has been taken to enable Russia to submit this initiative to the Paris Club for consideration and resolve the issue rapidly," he said.

"We did not discuss the [repayment] terms in detail. But I think that our terms will remain unchanged," he said.

Russia repaid $15 billion worth of debt to the Paris Club ahead of schedule in 2005.

Russia intends this year to pay off $11 billion-$12 billion ahead of schedule to the Paris Club of creditors, Russian Finance Minister Alexei Kudrin told a press conference on February 9.

Kudrin said Russia's creditors were not enthusiastic about early repayments, but that Russia expected to be able to make them all the same because of problems with the budgets in those countries. "We're confident of reaching an agreement," he said.

Kudrin said that $11 billion-$12 billion was practically all the Soviet-era debt that Russia could repay ahead of schedule to the Paris Club. Germany has issued its own notes for 6 billion euros of the debt, and that debt must be paid as per the schedule, he said.

Kudrin said Russia expected to repay the debt on the same terms as in 2005, that is, at face value. Russia should settle in full with all Paris Club creditor nations except Germany and possibly Switzerland, which rejected early debt payments in 2005.

Germany ready for talks

Germany, Russia's biggest creditor, has said it is ready to talk about Russian debt, but indicated that it would be guided by its own financial interests and would like to keep repayments to sensible amounts.

"We are interested in a no-loss situation," German Finance Minister Peer Steinbrueck said at a press conference Saturday. "We are not interested in huge early repayments as proposed by Russia. We are holding constructive negotiations in order to find a point of contact between Russia's interests and what is favorable for our budget," he said.

Early repayment could mean the budget falls short of its planned revenue, the minister said.

"Russia's early repayment of debt to the Paris Club could be used as an additional source to replenish capital for international financial organizations," Kudrin said as an additional argument in favor of early repayment.

Other G8 ministers gave this a cool reaction. Steinbrueck told the press that most of his colleagues did not see how these two issues were connected.