Paris Club Of Creditor Nations Reported To Propose New Repayment Schedule For Cuba Which Has Not Maintained A Previous 76% Write-Off From 2015.
/AFP (31 August 2023): “The Paris Club of creditors on Wednesday proposed a new timetable for the repayment of Cuban debt amid the communist island's worst economic crisis in decades, the state-owned press agency said. The agency reported that William Roos, the club's co-chairman, had during a visit to the country "proposed to establish a new timetable according to Cuba's ability to pay, and thus work together to find a solution" to payment delays.
NOTE: Mr. Roos is Assistant Secretary for Multilateral, Development and Trade Affairs, Direction Générale du Trésor (French Treasury).
A 2015 agreement between Cuba and the club wiped $8.5 billion of a sum of $11.1 billion owed, the rest being converted into investment projects or repayment staggered until 2033. But Cuba's financial difficulties have prevented the country from making payments due in 2019 and forced it to seek a moratorium on repayments until 2022. In June 2021, the parties agreed on a further delay. The Paris Club is an informal group of official creditors whose role is to find solutions to countries' debt repayment difficulties. Cuba also owes money to the London Club of private creditors. In February last year, the Russian Duma ratified a plan to restructure $2.3 billion of Cuban debt.”
THE GROUP OF CREDITORS OF CUBA AND THE REPUBLIC OF CUBA AGREE TO DEFER PAYMENTS DUE UNDER THE 2015 AGREEMENT [LINK]
“10 June 2021: The representatives of the Group of Creditors of Cuba and of the Government of the Republic of Cuba met in Paris on June 9, 2021 to amend the terms of the Arrangement dated 12 December 2015.
This agreement provides more time to the Republic of Cuba to honor several payments due under the 2015 Arrangement, while maintaining the present value of these amounts.
During the meeting, the delegation of the Republic of Cuba provided a description of the economic and financial situation of its country and presented the measures taken by the Government of the Republic of Cuba to support Cuban economic development in the context of the COVID-19 crisis.
The representatives of the Governments of the Group of Creditors of Cuba and the Republic of Cuba confirmed their willingness to preserve the 2015 Arrangement and their commitment to ensure the full implementation of this arrangement, which is a key milestone and entailed a normalization of financial relationships between the Group of Creditors of Cuba and the Republic of Cuba.
Background note: The Group of Creditors of Cuba includes Australia, Austria, Belgium, Canada, Denmark, Finland, France, Italy, Japan, the Netherlands, Spain, Sweden, Switzerland and the United Kingdom.”
AGREEMENT ON THE DEBT BETWEEN CUBA AND THE GROUP OF CREDITORS OF CUBA [Link]
“12 December 2012: The representatives of the Group of Creditors of Cuba and of the Government of the Republic of Cuba met from 10 December to 12 December and agreed on 12 December 2015 on an arrangement to clear USD 2.6 billion of debt in arrears due to the Group of Creditors of Cuba over an 18-year period.
This arrangement offers a framework for a sustainable and definitive solution to the question of arrears due by the Republic of Cuba to the Group of the Creditors of Cuba covering a total stock of debt of USD 11.1 billion, including late interest, as of 31 October 2015.
During the meeting, the delegation of the Republic of Cuba provided a description of the economic and financial situation of its country and presented the measures taken by the Government of the Republic of Cuba aimed at supporting the Cuban economic development.
The Group of Creditors of Cuba welcomed progress made by the Republic of Cuba towards the normalization of its relations with creditors and the international financial community.
Realization of payments under a formal commitment of the Republic of Cuba to fully clear its arrears is a necessary and important step for the normalization of financial relationships between the Group of Creditors of Cuba and the Republic of Cuba. The Group of Creditors of Cuba's export credit agencies that wish to do so will resume their export credit activities.
Background note: The Group of Creditors of Cuba includes Australia, Austria, Belgium, Canada, Denmark, Finland, France, Italy, Japan, the Netherlands, Spain, Sweden, Switzerland and the United Kingdom.”
Paris Club’s claims as of 31 December 2022, excluding late interest (in USD million) [Link]
ODA: Official Development Assistance
NODA: Non-Official Development Assistance
Cuba ODA: US$238 million; NODA: US$4.589 billion; TOTAL: US$4.827 billion
Who are the members of the Paris Club?
“The Paris Club is a group of currently 22 permanent members. Other creditor countries can participate in negotiation meetings on a case by case basis, provided that certain conditions are met. Finally, representatives of international financial institutions or countries can be invited to attend the meetings as observers.
The 22 Paris Club permanent members are countries with large exposure to other States woldwide and that agree on the main principles and rules of the Paris Club. The claims may be held directly by the government or through its appropriate institutions, especially Export credit agencies. These creditor countries have constantly applied the terms defined in the Paris Club Agreed Minutes to their bilateral claims and have settled any bilateral disputes or arrears with Paris Club countries, if any.
The following countries are permanent Paris Club members: AUSTRALIA, AUSTRIA, BELGIUM, BRAZIL, CANADA, DENMARK, FINLAND, FRANCE, GERMANY, IRELAND, ISRAEL, ITALY, JAPAN, KOREA, NETHERLANDS, NORWAY, RUSSIAN FEDERATION, SPAIN, SWEDEN, SWITZERLAND, UNITED KINGDOM, UNITED STATES OF AMERICA.
Other official creditors can also actively participate in negotiation sessions or in monthly "Tours d'Horizon" discussions, subject to the agreement of permanent members and of the debtor country. When participating in Paris Club discussions, invited creditors act in good faith and abide by the practices described in the table below. The following creditors have participated as creditors in some Paris Club agreements or Tours d'Horizon in an ad hoc manner: Abu Dhabi, Argentina, China, Czech Republic, India, Kuwait, Mexico, Morocco, New Zealand, Portugal, Saudi Arabia, South Africa (* prospective member on 8 July 2022), Trinidad and Tobago, Turkey”
LINK To Related Analysis
