Zee Beam News

31.05.2006 MosNews - All of the debts of the former Soviet Union will be settled this year, Russia's Finance Minister Alexei Kudrin promised on Tuesday, May 30. Russia even happens to settle its $22 billion debt to the Paris Club of creditors, despite the fact that some of the creditor countries demand a premium for ahead-of-schedule payment. "There is hope that this year we will settle debts with all foreign states, including the member countries of the Paris Club," Kudrin said after signing a relevant agreement with the last of former Soviet Union's large creditors — Kuwait. "In recent years Russia has had a very good credit history," the Russian minister added. As MosNews reported, Russia still owes $22 billion to the Paris Club of creditors. The largest creditor within the framework of this organization is Germany. Russia is making the credit payments with the money accumulated in Stabilization Fund, which collects windfall oil revenues. In his Budgetary address made on Tuesday, May 30, Russian President Putin announced that in 2007 "Stabilization Fund assets above the basic volume have to be directed solely for ahead-of-schedule payment of state external debt". Earlier, one of Putin's staunchest critics and his one-time ally, former presidential economic advisor Andrei Illarionov said on air at the Echo of Moscow radio station that decision to pay external debt with Stabilization Fund money is "expedient and feasible". The agreement signed with Kuwait presupposes that over the next five years this Middle Eastern country will receive $1 billion in cash and another $600 million in form of engineering products. Another $400 million of accumulated interest payments have been written off. This year Russia also plans to settle its debts to another seven countries, which include Serbia, Greece and Malta. Following the break-up of the Soviet Union Russia has inherited all of the Soviet property abroad, such as embassy buildings, but it also inherited all of the country's giant external debts.