Slovaks, Russians ink debt deal

SLOVAKIA has signed a deal with the Russian Federation to open the way for payment of Soviet-era debts that reached $1.1 billion at the start of 2002.

However, as part of the deal, Slovakia will have to write off $460 million to receive 30 per cent of that sum, around $138 million, in cash. The bulk of the remaining debt is set to be recovered through the delivery of goods through 2007.

In spite of the large write-off, the deal contains better terms than creditor countries have been offered by Russia in the past. The Czech Republic last year obtained 22.5 per cent of its real debt figure in a cash settlement, while Germany has received as little as 6.5 per cent.

According to Sergej Kolotuchin from the Russian Finance Ministry, the transaction will be carried out through Vnesekonombanka, which will buy the debt from the Russian government, thus bypassing the Russian state budget.

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