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Russia to write off 90 percent of Cuba's debt
Published on July 8, 2014 Email To Friend    Print Version

HAVANA, Cuba (ACN) -- The Russian lower chamber of parliament, or State Duma, on Friday ratified its agreement to write off 90 percent of the debt owed by Cuba.

According to a report by Russia Today, Moscow agreed to write off 90 percent of the island's $35. 2 billion debt to the former Soviet Union, while Havana will still have to repay ten percent, some $3.5 billion in a ten-year term.

The funds will be transferred to the account of Russia's Vnesheconombank (VEB) in the National Bank of Cuba and used to finance the economy of the Caribbean island nation, which remains under the US economic embargo, the report explains.

The agreement was signed by the Russian and Cuban governments in late October 2013. The first payment is to be made in October this year and the last one in April 2024.

The ratification by the State Duma of the accord comes as the Kremlin announced that President Vladimir Putin will visit the island on July 11 as part of a Latin American tour that also includes Argentina and Brazil.

Putin will participate at the summit in Brasilia of the BRICS group, the five major emerging economies: Brazil, Russia, India, China and South Africa.
 
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Comments:

David Lee:

they were never going to repay it any way

janebert:

Debt forgiveness is a fantastic thing for a lot of people, as it means less than the whole of a debt has been paid though the debt has been happy. However, it's regarded as taxable income and the lapse of a debt forgiveness tax break for foreclosures or short sales of homes is set to bite some taxpayers. With a personal loan, you can pay your taxes.

Moreover, the act of debt forgiveness can take place between nations such as the debt relief given to Cuba by Russia.The creditor nations may choose to engage in a loan write off rather than cripple the internal economy of the country. It isn't unusual for this to take place if there is a strong indication that the collapse of the economy of the stricken country may in turn have an adverse effect on the global economy. Isn't it a win-win situation?


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