Bulgaria is the first country which has reached agreement on a lump-sum cash settlement of its receivables from Iraq, BTA informs.
"I am satisfied with the Iraqi side strictly honoring its commitments assumed in the bilateral debt agreement. Let me recall that Bulgaria achieved the relatively best parameters in settling the outstanding debt problem. I am grateful to our partners of the Iraqi Finance Ministry, as well as for the fruitful consultations with the US Treasury Department," Bulgarian Finance Minister Plamen Oresharski said after the transaction, quoted in the press release.
Approximately one-third of the proceeds represent principal repayments, and two-thirds are due and overdue interest payments.
Arrangements are being made for a visit by the Iraqi Finance Minister to Sofia at Bulgaria's invitation. "Other mutually advantageous areas of bilateral cooperation will be discussed during that visit," Oresharski added.
The debt settlement negotiations began back in September 2005. On November 8, 2007, the Bulgarian Government approved a bilateral agreement with Iraq settling 1,860 million US dollars Bulgarian receivables (1,259 million dollars principal and 601 million dollars interest accrued until 2004), arising from intergovernmental agreements and protocols concluded before 1989. After additional charging of penalty interest and a direct payment coefficient, the Iraqi side agreed to an updated amount of its debt totaling 3,510 million dollars, and the Bulgarian side agreed to a direct payment coefficient of 10.25 cents per dollar, the press release says.