Paris Club Offers Cuba One-Year Moratorium; Cuba Wants Two-Years And Much More
/Wealthy nations offer Cuba one-year moratorium on debt
Thomson Reuters
London, United Kingdom
19 June 2020
By Marc Frank
“HAVANA (Reuters) - Wealthy nations grouped together within the Paris Club of creditors have offered Cuba a one-year moratorium on payment of debt that has been in default for more than three decades, according to two diplomats with knowledge of the negotiations. Cuba, earlier this year, had asked for a two-year moratorium and the waiving of penalties for overdue payments due to the new coronavirus pandemic. “The offer requires new negotiations in the spring of 2021 on the unpaid maturities as well as the scheme of future payments,” one diplomat said, requesting anonymity. “They will also have to pay the penalties on the money they owe,” he said. The Paris Club and Cuban government did not respond to a request for comment.
The 2015 Paris Club agreement, seen by Reuters, forgave $8.5 billion of $11.1 billion, representing debt Cuba defaulted on in 1986, plus charges. Repayment of the remaining debt in annual installments was backloaded through 2033 and some of that money was allocated to funds for investments in Cuba. Under the agreement interest was forgiven through 2020, and after that is just 1.5 pct of the total debt still due. The agreement states if Cuba does not meet an annual payment schedule in full it will be charged late interest for that portion in arrears.
Cuba owed an estimated $80 million last year, paying some countries in full, but not others, including the largest creditors Spain, France and Japan.
Cuba last reported foreign debt of $18.2 billion in 2016, and experts believe it has risen significantly since then. The country is not a member of the International Monetary Fund or the World Bank. The Cuba group of the 19-member Paris Club comprises Australia, Austria, Belgium, Canada, Denmark, Finland, France, Britain, Italy, Japan, the Netherlands, Spain, Sweden and Switzerland.”
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