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. Last Updated: 07/27/2016

Baker, Chirac Discuss Foreign Debt Relief for Iraq

PARIS -- U.S. special envoy James Baker and French President Jacques Chirac, laying aside differences over the Iraq war, agreed on Tuesday that international creditors must reach a deal to ease Iraq's huge debt in 2004.

The two presented a picture of unity at the start of a European trip, during which Baker hopes to win support for a debt relief deal for Iraq and ease a transatlantic dispute over contracts to rebuild the country.

They did not, however, announce any change in Washington's decision to bar countries such as France, Germany and Russia, which opposed the U.S.-led invasion of Iraq, from bidding for the contracts worth about $18.6 billion.

"The French and the U.S. government want to reduce the debt burden on Iraq so that its people can enjoy freedom and prosperity," Baker said after meeting Chirac.

"It is important to reduce the Iraqi debt burden within the Paris Club [of creditor states] in 2004 if possible," he said.

The International Monetary Fund puts Iraq's debts at about $120 billion, of which about $40 billion is debt and arrears to the 19 countries in the Paris Club. France is one of the largest creditors to Iraq from the Paris Club.

"[Baker and Chirac] agree on [the need for] finding the means to reduce Iraq's debt in 2004 in the Paris Club, in accordance with the appropriate conditions," an official at Chirac's office said.

"They also agree on the importance of working together in the reconstruction of Iraq," the official added. There was no word on whether Baker had offered France new hope of bidding for the lucrative contracts from which it has been barred.

France had signaled on Monday that it was keen to carve out a role in aiding Iraq, saying the Paris Club could reach a debt relief deal in 2004 and that France itself was ready to write off some of Iraq's debts.