February 12, 2006	Sunday	Muharram 13, 1427

MOSCOW, Feb 11: The world’s major economies gathered at a Group of Eight meeting in Moscow reacted coolly on Saturday to Russia’s offer to repay its Soviet-era debt to official creditors early.

“We are not interested,” German Finance Minister Peer Steinbrueck said as he left a Moscow meeting of the Group of Eight powers Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.

Russia, its coffers brimming with oil money, offered this week to repay up to $12 billion, nearly all of its Soviet era debt, to the Paris Club of official creditors this year.

Moscow also proposed that the money repaid ahead of schedule be passed along to the World Bank’s International Development Association for aid to the world’s poorest countries.

But finance ministers gave the proposal a chilly reception.

In a joint statement, G8 finance ministers said they “welcome that Russia’s improved fiscal position will allow it to seek further prepayment of its eligible debt owed to the Paris Club of creditors.”

But they made no further comment.

Germany had been counting on the Russian interest payments to help pay off its own debt, Steinbrueck said.

Germany’s budget forecasts depended on interest payments from Russia running to 2015, he said.

Giving up the Russian interest payments “would not be a good deal” for Berlin, he said, adding that the proposal should go to the Paris Club of major official creditors and be debated on a voluntary basis.

“There will perhaps be some countries interested and others who are not,” Steinbrueck said.

At a briefing in Paris ahead of the G8 meetings in Moscow, a member of the French delegation said that in reimbursing its Paris Club debt ahead of time, Moscow was only returning money owed to Western creditors who needed no advice on how to spend it.

Speaking to reporters ahead of the G8 talks, World Bank chief Paul Wolfowitz enthusiastically welcomed the Russian debt prepayment proposal but said Paris Club creditors “have to make their own decision” about what to do with the money.

“From the World Bank point of view, it’s a welcome possibility that contributions to the IDA would be increased and facilitated,” Wolfowitz told reporters Friday.

“The interest Russia has shown in providing additional resources is definitely something that is very much welcome and very much shows Russia’s understanding that being part of this G8 group means taking interest in how the poorest countries of the world are faring,” he said.

Russia, the world’s second largest oil exporter, finds itself able to repay the debt early because of soaring oil prices.—AFP