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Hungary cancels 80% of Iraqi debt

Hungary has cancelled 80% of Iraq's debt, an amount of $184 million, Ferenc Pichler, cabinet chief of the Finance Ministry said on Friday, confirming information originating from the Iraqi Finance Ministry.

The decision was in line with the agreement reached between the Paris Club of creditors and the Iraqi government in 2004 on canceling 60% of Iraq's debts so as to promote the reconstruction of that country, he said. The agreement envisaged that non-Paris-Club creditors would make similar deals with Iraq, opening the way for negotiations between Hungary and Iraq. According to Iraqi Finance Ministry figures, Iraq's government debt to Hungary has now declined from $230 million to $46 million. During Saddam Hussein's rule Iraq piled up debts of $130 billion towards its foreign creditors.