Zee Beam News

May 2006 RBC News - Russia plans to fully repay its debt to the Paris Club of creditor nations in 2006, Russian President Vladimir Putin said at a meeting with German businessmen on Thursday. "We hope that Germany, along with other countries, will accept our proposal," Putin said. In August 2005 Russia paid $15 billion of its Paris Club debt, of which Germany received about $6 billion. "I think this increased confidence of German businessmen in their Russian partners," he stressed. Russia financed its early debt payments using the Stabilization Fund, currently standing at RUR 1.7 trillion, or $60 billion. On April 6, Russian Finance Minister Alexei Kudrin signed a formal proposal to the Paris Club nations to prepay part of Russia's debt. "These nations may not want to take the whole of the debt," he added. In the estimation of the Finance Ministry, Russia could prepay $12 billion of its debt to the club. Russia's proposals will be discussed at the Paris Club meeting next month. If the Paris Club nations accept Russia's early pay offer, the money could be transferred by the end of August, Kudrin said. Russia owes about $20 billion to the club. Earlier this month Russian Prime Minister Mikhail Fradkov signed a decree to start negotiations with the Paris Club on the early payment of $12 billion. Russia's foreign debt dropped from $114.1 billion (19.3 percent of GDP) to $81.5 billion (10.6 percent of GDP) in 2005, due to significant debt payments, including early payment of $3.3 billion to the International Monetary Fund and $15 billion to the Paris Club.