{
  "id": "RL30617",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RL30617",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 104482,
      "date": "2001-06-06",
      "retrieved": "2016-05-24T20:24:08.015941",
      "title": "Russia's Paris Club Debt and U.S. Interests",
      "summary": "Russia faced both fiscal and external debt crises in August 1998. Russia's external debt became\nunmanageable as the servicing of the debt would have required 80% to 90% of the anticipated\nfederal revenue. These crises threatened Russia's ability to govern and to continue a process of\ntransition to a democratic market system. U.S. interests were directly involved because of the danger\nposed by a potentially unstable Russian economic, political and security system and the possible\nlinkage by policy makers between economics, security, political interests and debt settlement. Relief\ncame from a new IMF program, a short-term rescheduling \"framework agreement\" that suspended\nprincipal payments for Russian Paris Club debt through the year 2000, and substantial forgiveness\nof the Soviet era commercial London Club debt.\n Russia made debt rescheduling a key issue at the Okinawa G-8 meeting on July 21-23, 2000\nand in subsequent bilateral and international meetings. When the short term framework agreement\nended, Prime Minister Kasyanov announced in January 2001 a policy of partial servicing of their\nParis Club debt. Creditor reaction was so strong President Putin reversed Kasyanov and assured\ncreditors that all debt obligations would be met. Later, in early 2001, Russian leadership shifted its\nconcern to an external debt servicing crisis expected in 2003, noting that Russia would then either\nneed debt relief or would face default.\n  \n Germany's position as leading Paris Club creditor is that Russia should be able to meet its debt\nobligations. Germany holds about half of the $42 billion of outstanding Paris Club debts inherited\nfrom the Soviet Union. Germany's Paris Club Russian debt rose in 2001 by inclusion of a Russian\ncommitment to pay an earlier debt by the Soviet Union to the German Democratic Republic. The\nadditional $6 billion Russian debt is being given special treatment by Germany. Russia and\nGermany are discussing debt for asset swaps for this debt.\n Improved Russian economic performance has generated additional currency reserves and\nincreased revenue that has eased the burden of servicing their debts and meeting their needs for\ndiscretionary spending. Even with substantial reserves in the Russian Central Bank, the Ministry of\nFinance must either buy the reserves or reduce budget outlays in order to meet Paris Club debt\nservicing commitments. Without structural reform with changes in the incentive system, the\neconomic upswing may be part of a cycle rather than a new trend line of sustainable economic\ngrowth. Reducing the debt service requirements through further rescheduling, limiting subsidies,\nand containing defense spending may be necessary if Russia is to meet the budgetary needs for\nimplementing the structural reform.\n U.S. options in Paris Club Soviet Era negotiations range from no rescheduling to deep debt\nrestructuring and use of debt swaps. The United States gives more explicit attention than Germany\nand other Paris Club members to the linkage between Paris Club agreements and foreign and security\naffairs.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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      "topics": []
    }
  ],
  "topics": [
    "Economic Policy",
    "Foreign Affairs",
    "National Defense"
  ]
}