Paris Club to agree tsunami debt moratorium

PARIS - The Paris Club of government creditors is ready to agree to a debt moratorium for nations hit by the Asian tsunami at a meeting in Paris on Wednesday, French Finance Minister Herve Gaymard said on Sunday.

"We (France) will propose a moratorium on the debt. The Paris Club countries accept this. We have consulted them," Gaymard told Europe 1 radio in an interview.

Finance ministers of the Group of Seven industrialised countries said on Friday they had agreed to freeze the debt repayments of nations hit by the tsunami and would work with the Paris Club and other creditors on arranging how.

The G7 finance ministers agreed to urge the International Monetary Fund, the World Bank and the Asian Development Bank and other multilateral institutions to make the strongest possible efforts to assist ravaged nations struggling with a tragedy that has killed more than 150,000 people.

Asian countries affected by the devastating December 26 waves have a total of about US$272 billion ($396.27 billion) in external debt, with Indonesia alone owing some US$48 billion to the Paris Club.

That Indonesian debt would generate more than US$3 billion in principal repayments alone this year.

- REUTERS