Germany to accept 1.3 bln euros in early payment of Russian debt

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Germany has agreed to accept 1.3 billion euros (about $1.7 bln) in early payment of the former Soviet debt to the Paris Club, a source at the G8 finance ministers meeting in St. Petersburg said Saturday.

MOSCOW, June 10 (RIA Novosti) - Germany has agreed to accept 1.3 billion euros (about $1.7 bln) in early payment of the former Soviet debt to the Paris Club, a source at the G8 finance ministers meeting in St. Petersburg said Saturday.

The debt will be paid at par value.

The former Soviet debt to Germany, which is Russia's largest creditor at the Paris Clubs, is 7.7 bln euros (about $10 bln).

President Vladimir Putin said earlier that Russia hoped to be able to pay off all its debts to the Paris Club of creditors by yearend.

"This year we plan to fully cancel our liabilities to the Paris Club. We hope that Germany and other countries will be able to take advantage of our offer," he said.

Russia in 2005 made pre-term payments of $15 billion to the Paris Club - an informal grouping of 19 governments that have large financial claims on various other governments - and planned to pay off an additional $12 billion in 2006. Germany, however, in 2004 converted its $6-billion share of the debt to 3- and 5-year notes and 10-year bonds that cannot be repaid before maturation.

The Finance Ministry says Russia's aggregate debt to the Paris Club stood at $29.8 bln as of October 1, 2005. Russia took on the Soviet Union's entire foreign debt, which came to $107.7 billion in January 1992, under an agreement with the other former Soviet republics.

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