VZCZCXRO5003
OO RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHRL #3281 3131757
ZNR UUUUU ZZH
O 091757Z NOV 06
FM AMEMBASSY BERLIN
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6057
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS BERLIN 003281 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN IZ GM
SUBJECT: NO GERMAN PLANS FOR FURTHER IRAQI DEBT RELIEF 
 
REF: STATE 181094 
 
¶1. (SBU) Johannes Kindler, Deputy Director General of the 
Federal Chancellery, and Rolf Wenzel, Deputy Director General 
for International Financial and Monetary Policies of the 
Ministry of Finance, told Embassy officers in separate 
meetings that Germany was unlikely to forgive further Iraqi 
debt beyond its Paris Club commitment. 
 
¶2. (SBU) Kindler highlighted the legal and political 
difficulties of such a move.  He noted that the Germany's 
political decision to commit to the Paris Club terms of 80 
percent debt relief was extraordinary, given that Iraq was 
not a lesser developed country and the debt was commercial 
instead of development assistance. 
 
¶3. (SBU) Wenzel suggested that relief from the remaining 20 
percent of debt would provide little additional benefit to 
Iraq, since payments on interest are slated to begin only in 
2009 and on principal in 2011.  Debt forgiveness would 
therefore not "put additional money on the table" for Iraq to 
use in development and capacity building.  Wenzel rejected 
the argument that debt relief would encourage private 
investment, noting that Iraq's problem was security, not lack 
of finance.  A recent IMF report on Iraqi was positive about 
its finances and made no mention of the need for more debt 
relief. 
 
¶4. (SBU) According to Wenzel, the German Finance Ministry 
approached the Iraqi Ministry of Finance in September with an 
offer of technical assistance that might focus on, for 
example, how best to privatize former state-owned companies. 
They offered to bring Iraqi officials to a workshop in 
Germany assess their needs.  To date, the Iraqis have not 
responded. 
BAUMAN