Cuba Makes Important Strides in Paris Club Debt Talks

Cuba has reached an important agreement on the island's debt with the world's wealthiest creditor countries, in what is being called an important step for Havana in its economic relations.

An official source announced that the group of the world’s richest countries, known as the Paris Club, agreed with Cuba that the Caribbean nation owes a sum of US$15 billion, stemming from a 1986 default. The figure is set to include the principal, service charges, interest and penalties.

The next step is to agree a series of meetings between the government of Havana and the Club's officials, in order to determinate how the debt will be paid.

The Paris Club, an informal group of lender nations, was founded in 1956, when Argentina was renegotiating its debt. It treats each country on a case-by-case basis after a debtor contacts the group.

Between 1983 and 2014, the Paris Club signed more than 430 agreements with 90 debtor countries, amounting to US$583 billion. Many countries in Latin America met with the group in the 1990s, as result of the harsh measures imposed by International Monetary Fund and other international lenders.

The organization has no legal standing or constitutive texts, instead it is governed by a number of principles and rules, which allow it to be very flexible in dealing with the different situations of debtor countries.

Cuba’s approach to the group of wealthy creditors is also part of the new developments in the island's foreign policy, which include the ongoing process to restore relations with Washington.