Shevardnadze rules out default in Georgia

In a traditional Monday radio interview, Georgian President Eduard Shevardnadze said no default threatened the national financial system. "It is the uncertainty in their victory at parliamentary elections that makes some political forces to threaten the population with default," Shevardnadze said adding that economists who are well aware of the situation in Georgia know that international accounts in his country are out of danger.

Georgian Deputy Finance Minister Zurab Soselia told RIA NOVOSTI last Friday that Georgia faced an announcement of default because of the inability to repay debts and interest on them. He mentioned the government's decision to begin this September bilateral talks with creditor countries on debt restructuring to avoid default.

"If these talks are no success and the country fails to postpone debt repayment to the end of the year, the danger of foreign accounts being arrested will become real," he added.

Georgia's debt to Turkmenia stands at $315 million, to Russia at $159 million, to Kazakhstan at $27.7 million, to Armenia at $19.5 million and to Azerbaijan at $16.1 million.

Georgia owes the Paris Club $600 million; its total foreign debts amount to almost $2 billion.