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Russia: Paris Club Welcomes New Creditor Nation

Paris, 17 September 1997 (RFE/RL) - Russia was formally admitted to the prestigious Paris Club of creditor nations today. Admission to the group is expected to allow Russia to better coordinate its debt-recovery efforts with other club members. Debts owed to Russia are estimated to be about $140 billion.

A memorandum on membership was signed in the French capital by Russian First Deputy Prime Minister Anatoly Chubais and Chairman of the Paris Club, Christian Noyer.

Russia's chief debtor nations are Vietnam, Mozambique, Algeria and Yemen. All incurred debts to the Soviet Union before its disintegration at the end of 1991.

Chubais told journalists in Paris today that Moscow expects to recover $600 million a year from its debtor countries -- about three times as much as it recoups now.

Until now, Russia has only been a borrower, not a creditor, in its relations with the Paris Club. Moscow has sought creditor status for years, but admission was granted only after the Group of Seven leading industrial nations agreed to support its membership at a summit meeting three months ago. All G-7's members are also members of the Paris Club.

Meanwhile, a spokesman for Deutsche Bank said today that Russia and its commercial bank creditors will sign an agreement on October 6 on a repayment schedule for $35 billion in overdue loans and interest.

The spokesman said the signing would take place in Moscow, and that the debt rescheduling is expected to be completed in early December.

Last week, Russian Deputy Finance Minister Mikhail Kasyanov and Vnesheconombank Chairman Andrei Kostin said they would agree on a signing date after talks with Deutsche Bank officials.

Deutsche Bank chairs the steering committee of the London Club of commercial creditors, which has been in negotiations with Moscow for almost six years on terms for repaying overdue loans and interest. London Club creditors are owed thousands of millions of dollars by former Communist states that borrowed the money before the disintegration of the Soviet Union.