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Volume 410: debated on Friday 19 September 2003

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To ask the Chancellor of the Exchequer whether it is his policy that Iraq's debt should be written off. [129860]

The Government's paper "A Vision for Iraq and the Iraqi People" of 17 March made it clear that we are seeking a fair and sustainable solution to Iraq's external debt problems.The Government believes the most effective way to deliver a fair and sustainable solution is by asking the International Monetary Fund (IMF), International Bank for Reconstruction and Development (IBRD) and other responsible international organisations, to make a full assessment of Iraq's needs, resources and obligations. We expect this to be followed by a shared solution through the Paris Club of official creditors and comparable treatment from other creditors. On 14 April the Prime Minister stated in this context that he hopes people will be generous in recognizing Iraq's needs for the future.We strongly supported the International Monetary and Finance Committee (IMFC) and Development Committee statements about the importance of ad Dressing the debt issue. The IMF and IBRD have started making their assessments.UNSCR 1483 welcomes the readiness of creditors, including those of the Paris Club, to seek a solution to Iraq's sovereign debt problems, protects oil revenues from seizure until December 2007, and provides a transparent route for settlement of UN compensation claims.We welcomed the 10 July Paris Club statement that creditors "…share the view that they don't expect Iraq to be in a position to resume payments to them before end 2004." We expect this unofficial moratorium to allow sufficient time for the establishment of an internationally recognized, representative Government of Iraq, legally empowered to negotiate and agree an IMF programme and debt treatments with creditors.