Western creditors and Cuba pledge to salvage debt deal
2023.09.01 15:24
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© Reuters. FILE PHOTO: A man pushes a tricycle loaded with goods at a street market in Havana, Cuba, August 19, 2023. REUTERS/Alexandre Meneghini/File Photo
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By Marc Frank and Nelson Acosta
HAVANA (Reuters) – Representatives of 14 western creditor nations, grouped in the Paris Club, were in Cuba this week to salvage a debt agreement with the import dependent country which is expected to default on payments for a fourth consecutive year.
“The discussions enabled us to come closer to finding a solution to delays in meeting (Cuba’s) obligations … negotiations will continue to establish a new payment plan agreeable to both sides,” a brief statement released on Thursday evening said.
William Roos, co-chairman of the Paris Club, had said on Wednesday that he proposed a plan which apparently was rejected.
Thursday’s statement said Foreign Investment and Cooperation Minister Ricardo Cabrisas had expressed the Communist-run government’s determination to meet its obligations as soon as conditions permitted.
Cabrisas was seen on state television during the talks blaming tough new U.S. sanctions on top of the decades old trade embargo and the pandemic for the payment delays.
The 2015 Paris Club agreement forgave $8.5 billion of the $11.1 billion in sovereign debt Cuba defaulted on in 1986. Cuba agreed to repay the remainder in annual installments through 2033.
The country’s foreign exchange earnings used to import goods and pay debt have fallen by more than 50% since the deal was signed, according to official statistics.
Gross domestic product is eight points short of its 2019 pre-pandemic level, the government reported.
Reuters, which has seen the agreement, estimates Cuba has failed to pay the creditors more than $500 million as it struggles with shortages of food, medicine, fuel, and other basic goods amid rising social tensions. The estimate includes money due by November.
Cuba, which last reported foreign debt of $19.7 billion for 2020, has restructured debt with Russia, China and some other creditors since then. The Caribbean island nation is not a member of the International Monetary Fund nor the World Bank.
The Cuba group of the 22-member Paris Club, which manages old sovereign debt, comprises Australia, Austria, Belgium, Canada, Denmark, Finland, France, Britain, Italy, Japan, the Netherlands, Spain, Sweden and Switzerland.
