TOMSK, April 27 (RIA Novosti) - Russia is willing to pay Germany $9.5 billion to completely clear its inherited Soviet bilateral debt, part of which is currently held in bonds, the finance minister said Thursday.
Alexei Kudrin said payment would be an effective use for the Stabilization Fund, which Russia set up to harvest windfall oil revenues above a cutoff point of $27 per barrel, and would have no deleterious effects for the domestic economy.
"This means just the [bilateral] part of the U.S.S.R.'s debt to Germany, which currently stands at some $9.5 billion," he said.
Early repayment could save Russia several hundred million dollars, Kudrin said, as even if Russia paid off everything, Germany would keep paying interest on bonds.
Germany in 2004 issued Aries bonds worth $6 billion with maturity terms of three, five and ten years that cannot be paid off until the end of the maturity term.
Kudrin said early repayment could be carried out only on conditions coordinated with all members of the 19-member Paris Club of creditor nations.
"In this case, we can hold consultations, but the decision will be made by a consensus of all creditors," he said. "These [commercial loans] are easier to repay than other forms of market debts. But Germany issued bonds of its own, whose maturity date was synchronized with this Russian debt."
Kudrin said the U.S.S.R. had taken the initial loan at very high rates of interest, which he said explained why Germany was reluctant to accept preterm payment.
