Russia: Cabinet approves US payment of Paris Club debt

Russia: Cabinet approves US payment of Paris Club debt
Russia: Cabinet approves US payment of Paris Club debt

The plan, which will boost Russia's economic clout as it hosts leaders of the Group of Eight leading industrialized nations in St.Petersburg next month, includes a US$1 billion premium to the face value of the debt.

While the majority of creditors in May had already indicated their willingness to accept Russia's proposal to retire their Soviet-era debt, Germany had resisted Russia's offer as it is reluctant to lose the stream of relatively high interest payments, according to the AP.

At the G-8 finance ministers meeting earlier this month, Germany said it was willing to accept early payment of US$1.6 billion, but warned that Moscow would have to pay a premium to retire the remaining US$8 billion owed to it ahead of schedule.