Putin To End Debt History of USSR This Year

Officials with Russia’s Ministry for Finance said that Prime Minister Vladimir Putin ordered to repay the remaining part of the commercial debt of the USSR. The debt - $34 million – is to be paid to the London Club of Creditors before the end of the current year. The payment will mark the end of the debt history of the Soviet Union as a state, The Kommersant newspaper wrote.

Photo: Putin To End Debt History of USSR This Year

“We hope to coordinate the conditions with all creditors and repay the debt until the end of the year,” the director of the Foreign Debt Department of the Ministry for Finance, Konstantin Vyshkovsky said. The debt will be paid from the federal budget, he added.

The London Club of Creditors, an association of private commerce banks, was founded in 1976 to help developing countries solve their debt issues. The club includes about 600 commerce banks of industrially developed countries. A big part of the USSR’s debt to the London Club was restructured in 2000.

The commercial debt of the Soviet Union is the balance on operations of Soviet foreign trade organizations. $34 million, which the creditors of the London Club will receive in 2009, will be the last part of the USSR’s debt to the banks.

Putin set a goal during his presidency to cut the amount of Russia’s foreign debt against the background of growing prices on raw materials. As a result, Russia had paid $22.5 billion to Paris Club by the end of August 2006, and the nation’s state debt amounted to $53 billion afterwards (9% of the GDP).

The Russian public debt reached its peak in 1998 – 146.4 percent of the GDP. As of January 2000, Russia’s foreign debt made up $158.7 billion. The home and foreign debts totaled 84 percent of the GDP.

For comparison, the public debt of Germany made up 68 percent of the GDP as of 2005, France – 66 percent, the USA – 53 percent, Britain – 43 percent, Norway – 36 percent, Australia – 12 percent, Kazakhstan – 10 percent, Hong Kong – 2 percent.

Russia is ranked eighth on the list of the US public debt holders. The United States owes Russia 2.5 percent of its public debt - $65.3 billion.