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(TALKZIMBABWE) France could write off Zim debt

France could write off Zim debt
by Estelle Shirbon
25/06/2009 00:00:00

FRENCH Prime Minister Francois Fillon said on Thursday France was open to discussions with Zimbabwe about cancelling the country's Paris Club debt.

Speaking after meeting Zimbabwean Prime Minister Morgan Tsvangirai, Fillon said if Zimbabwe gave guarantees that it would spend the savings on development projects and if democracy took root in Zimbabwe then France would consider a write-off.

"I indicated that France was prepared to renegotiate Zimbabwe's debt in the framework of the Paris Club but with a specific offer from France which would involve converting that aid (savings from a debt write off) into development projects," Fillon said at a press conference with Tsvangirai.

But he said discussions with Zimbabwe on both debt and aid could take a while and Thursday's meeting only marked the start of a discussion. A French government official said the amount owed by Zimbabwe to France in Paris Club debt was around 400 million euros.

France gave Zimbabwe around 6 million euros in aid last year and 3 million euros so far this year and plans to continue at the same pace. The money is directed towards food aid and the fight against HIV/AIDS.

The official said that the debt discussion would take years and that it would be conducted in consultation with other Paris Club creditor nations. Progress would very much depend on democracy taking hold in Zimbabwe and economic reforms being implemented, the official said.

France is Zimbabwe's second biggest sovereign creditor. Tsvangirai was in Paris on the last stop of a tour to Europe and the United States to raise cash from donors. Zimbabwe says it needs $10 billion to rebuild its shattered economy.

Tsvangirai formed a unity government with rivals Arthur Mutambara and President Robert Mugabe in February to end a political and economic crisis.

The Prime Minister called his tour a success, though he won few commitments of aid amid new U.N. warnings of food shortages in his country.

Many Western nations want Mugabe to step down and are reluctant to offer Zimbabwe major aid or donate money directly to the government.

"Why are the funds going to NGOs and not the government? ... To us that is neither here nor there," Tsvangirai said. "The funds that are being given are going to Zimbabweans."

He said he was "not disappointed at all" in the limited aid commitments, insisting that his visits to foreign capitals were aimed at building a "new foreign policy relationship."

"If our objective was to re-engage, it's very successful," he said.

French junior minister for cooperation, Alain Joyandet, said after meeting Tsvangirai: "France is beside and supports the unity government," Joyandet said. While aid is currently focused on charity groups, he said, "things could be progressive" toward direct government aid.

Also Thursday, Tsvangirai met with French Foreign Minister Bernard Kouchner. He will meet Friday with Finance Minister Christine Lagarde, a group of leading French executives and the director of the French Development Agency.

When Tsvangirai visited Britain this week, Prime Minister Gordon Brown pledged 5 million pounds ($8.2 million) in new aid for food projects and textbooks. Britain said aid would be distributed by charities.

In London, angry exiles shouted him off stage when he appealed to them to return to the battered African nation.

In Washington, President Barack Obama made clear he's not convinced Tsvangirai can turn the country around in partnership with Mugabe. The European Union told Tsvangirai it wants to see improvements in human rights before restoring aid.

The Prime Minister returns home on Friday, via South Africa where he is expected to spend time with his family, a spokesman said. – Reuters/AP

Labels: DEBT, FRANCE, ZIMBABWE

posted by MrK @ 7:45 PM