Final Word from Wednesday, February 15, 2006
Russia is rolling in money, thanks to high energy prices, and it wants to use its windfall to pay off its debts to the Paris Club of creditors early. This has little effect on the CR, because it sold most of its claims against the former Soviet Union to Falkon Capital in 2001 for 23% of the face value. Great pains were taken at the time to make sure this controversial deal didn't ruffle the feathers of the Paris Club. Russia's finance minister, Aleksei Kudrin, said last week that no one expected Russia's debts to be serviced so well, and there's no guarantee the CR would have received more cash if it had waited like everyone else. (Russia wants the Paris Club money to be used to wipe out third-world debt.) But it is of historical note that the Zeman government risked an international tussle with other creditors for a murky deal that ultimately cost the CR nearly $3bn in hard cash or goodwill. [Czech Republic Miloš Zeman debt repayment forgiveness]