Paris Club adjusts payment schedule to collect multi-million dollar debt to Cuba

Paris Club adjusts payment schedule to collect multi-million dollar debt to Cuba

HAVANA, Aug. 31st. The Paris Club once again gave Havana another opportunity this Wednesday to settle its debt, by establishing “a new calendar” payment that adjusts to Cuba’s capacity, according to official media reports. During a meeting in the Cuban capital with senior officials of the Paris Club, the Minister of Foreign Trade and Foreign Investment of Cuba, Ricardo Cabrisas, once again resorted to the US embargo and the inclusion of the island’s regime in the list of Sponsoring States of Terrorism, to justify the delay in payments.

The co-president of the Financial Club, William Roos, would have expressed to the Cuban negotiators his understanding of the economic difficulties that the Caribbean country is going through, asked for “as much information as possible” and proposed “to establish a new calendar in accordance with the payment capacity of Cuba”, according to the report of the official Cuban News Agency

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Cuba agreed in 2015 to rearrange its debt with the creditors of the international financial institution, which forgave the island 8.5 billion dollars of the 11.1 billion it failed to pay in 1986, plus charges.

Despite the established commitment to repay the rest in annual installments until 2033, Havana has defaulted on its obligations since 2019, when it made a partial payment. In 2020 and 2021 it did not pay a penny, transferring the total debt to 2022, the Reuters news agency reported at the time.

Cuba, which is not a member of the International Monetary Fund or the World Bank, has accumulated large debts in the international financial market for years.

Earlier this year, the island faced a lawsuit in London’s High Court brought by the investment firm CRF I Ltd against the Cuban government for the non-payment of two loans of 72 million euros, originally granted by European banks in the decade 1980.

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Although the court said that it did not have jurisdiction to hear the lawsuit against the government, it argued that it did have jurisdiction against the Banco Nacional de Cuba, responsible for registering, controlling, and servicing the debt.

In January of this year, former Cuban Economy Minister José Luis Rodríguez estimated the country’s international reserves at 11,528 million dollars in 2019, and estimated that they had decreased by 2,500 million or 22% until 2021, revealing a severe decrease that should only have worsened in the two years that followed, amid rising economic inflation.

“Cuba does not pay its debts, it does not pay its debts to the Paris Club, therefore, it is in a default situation and, if you are in default, the financial markets do not lend you money and, if they do not lend you money, you can’t buy oil, energy, or anything,” Cuban economist Elías Amor said last September, in an analysis of the need to hold the communist authorities accountable for the economic debacle on the island.