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Britain Pushes Debt Relief for Tsunami-Stricken Nations


04 January 2005

Britain is forecasting approval of a major debt-relief package for the Asian nations hit by last week's Indian Ocean tsunami.

The world's main creditor nations, known as the Paris Club, will meet next week in the French capital to consider a moratorium on debt repayments by the countries most affected by the December 26 disaster.

British Foreign Secretary Jack Straw says the idea is to give the tsunami-stricken countries some time and money to focus on their immediate needs.

"The debt payments should be suspended, not cancelled altogether, and that will then give, as it were, a breathing space for the debtor and creditor countries to come together to consider whether in some cases the debt should be cancelled altogether or whether in other cases maybe the debt payments should be resumed," said Mr. Straw. "All these countries are now facing massive costs because of this God-made disaster and have to work out a way of dealing with those costs. Debt relief is one possibility."

The British treasury minister, Gordon Brown, says the freezing of debt repayments would release about $3 billion a year that the affected countries could use for reconstruction.

Mr. Brown says he has gotten support for the proposal from U.S. Treasury Secretary John Snow, as well as finance officials from France, Germany, Italy and Japan.

Mr. Brown says that besides responding to the immediate emergency, the world's richest nations need a coordinated long-term strategy on aid and debt to help combat poverty in developing countries.

Britain took over the rotating presidency of the Group of Eight industrial nations on Saturday, and Mr. Brown says he will use the opportunity to promote a new development fund to tackle the root causes of poverty. He plans to present details next week.

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