HAVANA (Reuters) – Cuba and the Paris Club of wealthy creditor nations have agreed that Cuba owes $15 billion stemming from a 1986 default, an important first step toward renegotiating the debt, Western diplomats said. “The final amount of $15 billion has been approved by both parties, so that is a big first step and now the creditors will meet to set policy for formal talks,” said one of the diplomats with knowledge of the talks, speaking on condition of anonymity.
The figure represents the total that Cuba owes 16 Paris Club nations from its 1986 default and includes principal, service charges, interest and penalties.
The diplomats said the agreement was another sign that Cuba’s communist government is interested in rejoining the global economy and adhering to international financial rules.
The two sides can now move on to the next phase of renegotiating payment terms. Cuba has achieved significant debt forgiveness in similar negotiations with other creditors in recent years. Most Paris Club creditors are willing to show flexibility with Cuba due to their increased interest in doing business here following the Caribbean island’s detente with the United States, the diplomats said. US President Barack Obama and Cuban President Raul Castro announced in December their governments would work toward a normalization of relations after decades of confrontation.
“Everyone wants to put this behind them now and move forward, and frankly, after 30 years I think the banks will be happy just to get something back,” a European diplomat said.
Cuba does not comment on debt negotiations.
The government last reported its “active” foreign debt, accumulated after it declared a default, at $13.9 billion in 2011. It no longer reports its “passive” debt from before the default, which economists estimate at $8 billion plus interest, service charges and penalties owed governments and commercial creditors.
