At the end of 2004 Iraq signed a memorandum with the creditors from the Paris Club for reduction of its official debts - 80 per cent waiver of confirmed debts and rescheduling of the remaining 20 per cent over a period of 23 year with a six-year gratis period, the Finance Minister said.
On November 8 the Bulgarian government approved a bilateral agreement between Bulgaria and Iraq which settles Bulgarian receivables from Iraq to the amount of 1,860 million dollars together with a principal of 1,259 million dollars and interest to the amount of 601 million dollars by 2004.
Iraq accepted a new updated amount of its debts totalling 3,510 million dollars and the Bulgarian side accepted a 10.25 cents per dollar coefficient of direct payment, Oresharski said.
The conditions set down in the bilateral agreement are within the framework of Iraq's agreement with the Paris Club creditors. These provide that in the first half of 2008 Iraq will make a one-time payment of 360 million dollars to Bulgaria, which is approximately one-third of the debt's principal.
Iraq's debt to Bulgaria was amassed in the 1980s and stopped servicing it in 1992, the Financial Minister explained.
"We are exceptionally satisfied with the successful end of nearly two years of negotiations with our Iraqi partners on the inherited debt problem," Oresharski added.