Russia to Partially Write-off Cuba’s Soviet-Era Debt
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Moscow has agreed to write off part of Cuba’s $30 billion debt and will offer a 10-year refinancing plan for the remaining amount, Russia’s industry and trade minister said today.
The preliminary agreement means Cuba will not have to shoulder the full burden of its Soviet-era debt, but details of the specific proportion of debt to be written off and restructured will only be finalised by the end of the year, said Russian industry and trade minister Denis Manturov at the sidelines of talks in Havana between Prime Minister Dmitry Medvedev and Cuba’s Raul Castro.
Moscow has agreed to write off part of Cuba’s $30 billion debt and will offer a 10-year refinancing plan for the remaining amount, Russia’s industry and trade minister said today.
The preliminary agreement means Cuba will not have to shoulder the full burden of its Soviet-era debt, but details of the specific proportion of debt to be written off and restructured will only be finalised by the end of the year, said Russian industry and trade minister Denis Manturov at the sidelines of talks in Havana between Prime Minister Dmitry Medvedev and Cuba’s Raul Castro.
“There was an accumulated debt on loans allocated by the Soviet Union and we have now prepared an agreement that should undergo all the necessary procedures,” Manturov explained, adding that Moscow will provide sovereign guarantees to a syndicate of Russian banks financing the deal.
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As part of new bilateral agreements, Russia will also lease eight jets worth $650 million to its Cold War-era ally.
Moscow was Havana’s main ally and source of economic support for three decades until the collapse of the Soviet Union, which pushed the island to the brink of collapse during the “Special Period” of the 1990s.
According to a 2010 WikiLeaks cable, Italian diplomats had warned in 2009 that Cuba may “become insolvent as early as 2011.”
“Promised structural reforms remain on hold while the Cuban government wrings its hands in indecision, fearful of the political consequences of these long-overdue changes,” the cable said, adding that the communist-state had stopped making debt payments to foreign countries and companies since the 1990s.
Bilateral trade reached $200 million last year and Russian and Cuban news agencies reported that both countries are keen to deepen trade and economic ties in the areas of energy, pharmaceuticals and industry.
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