ISLAMABAD, Jan 8: Italy has cancelled about 90 million euros of Pakistan’s foreign debt making it conditional for Islamabad to use the finances to assist Afghan refugees, Dawn learnt from UN sources.

According to the sources, the joint decision made by Italian foreign minister Renato Ruggiero and finance minister, Giulio Tremonti, is part of the Italian government’s political-cum-financial strategy in favour of Pakistan and Afghanistan.

The decision was adopted on the basis of legislation providing for reduction of the debt of poor countries and was approved unanimously by the Italian parliament. The law permits cancelling of debt owed in cases of natural catastrophe or grave humanitarian crises to alleviate the conditions of those affected.

The Italian initiative is in line with the financial strategy for fighting poverty around the world that led the Paris Club, the international forum gathering some of the most important international bilateral creditors, to restructure Pakistan’s onerous debt last December.