For Immediate Release
November 23, 2004

Global Message

Paris Club creditors have agreed to reduce Iraq's official debt by 80 percent, demonstrating strong international support for Iraq's reconstruction and integration into the world economy.

Iraq's $38.9 billion debt to Paris Club creditors will be reduced to less than $7.8 billion in three stages: first, by 30 percent immediately; second, by 30 percent in 2005, and third, by 20 percent after three years of successful performance.

The final level of debt reduction is expected to be more than 90 percent due to the inclusion of the standard Paris Club discount on Russian debt and additional reduction some creditors will provide beyond the Paris Club terms. The United States expects to forgive 100 percent of Iraq's debt to it.

Iraq's total foreign debt is about $120 billion. Under the Paris Club agreement, Iraq will seek at least comparable treatment from its other official and private creditors. The U.S. encourages these creditors to take action to reduce Iraq's debt as soon as possible.