December 1, 2021

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Cuba postpones debt payments to the Paris Club until 2022

Cuba postpones debt payments to the Paris Club until 2022

Cuba will not have to repay its debt to the Paris Club until next year, according to the British Reuters agency. The document signed between the two parties last June represents a new postponement of the Havana government by postponing the resumption of debt payment until 2022, which is currently estimated in arrears at about $ 200 million after the suspension of deadlines in 2019.

The document also provides for readjustment of the new payment terms, but Reuters sources, diplomats from five countries involved, do not know if there are penalties for non-payment.

The document also provides for readjustment of the new payment terms, but Reuters sources, diplomats from five countries involved, do not know if there are penalties for non-payment.

Another agreement last Friday, this time with Russia due to a delayed repayment of an interstate loan, Havana also stopped repaying last year, which was considering raising the final amount by $11 million, in return for the late repayment interest.

Cuba in 2015 signed a historic agreement with the Paris Club, canceling it 8,500 million dollars of a total debt of 11,000 million with an obligation to pay the remaining amount in installments until 2033, but the island stopped paying the installments in full in 2019 and in 2020, with the epidemic already He didn’t hand over a dollar.

The agreement was introduced in June, when the parties announced the amendments after a meeting between Cuban Deputy Prime Minister Ricardo Cabrisas, its chief foreign debt negotiator, and Emmanuel Molin, director general of the Treasury and president of the Paris Club.

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At that time, the Cuban side blamed the default on the “unprecedented tightening of the economic, commercial and financial embargo of the United States and the impact of phenomena related to climate change and the Covid-19 epidemic.”

“I expect a fairly strong return of tourists that will affect other activities and that will improve repayment prospects a little bit in 2022,” one of the diplomats told Reuters.

The reopening of the borders, scheduled for November 15, will reactivate one of the first sectors of foreign exchange income for the Cuban government, although the authorities’ forecasts put the 100,000 travelers who will arrive on the island this winter, a small part of what they want. Receive in a normal year. If expectations are met, the recovery will be slow and Cuba must continue to face multiple commitments.

“My understanding is that most payments are also on hold,” another source told the British agency regarding debts with Russia, Japan, the London Club or Mexico, among others.

“My understanding is that most payments are also on hold,” another source told the British agency regarding debts with Russia, Japan, the London Club or Mexico, among others.

In the original agreement of 2015, the Paris Club ceded to Cuba all interest on the debt until 2020. After that, only 1.5% of the total debt was outstanding, and part of this money was allocated to investment funds in Cuba.

“We are united in our conviction that the agreement must be salvaged, and we believe that the Cubans agree,” said a diplomat from a country in the Paris Club a year ago. So the rich countries hope to get at least some of what they owe.

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Havana declared $18.2 billion in external debt in 2016, but many experts note that it has increased significantly since then. The country is not a member of the International Monetary Fund or the World Bank.

The Paris Club consists of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Great Britain, Italy, Japan, the Netherlands, Spain, Sweden and Switzerland.

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