Berlin to reschedule 1.25 billion euro debt with Syria

Published October 29th, 2000 - 02:00 GMT

Berlin and Damascus will shortly finalize an accord to reschedule Syria's debt to Germany, estimated at about 1.25 billion euros (one billion dollars), a European diplomat in Damascus told AFP Thursday. The countries have a preliminary deal for a new 20-year repayment schedule, starting with an interest-free five-year grace period, said the diplomat, who requested he not be named. 

 

The outlines of the accord were settled during negotiations at the start of October in Damascus between officials and Germany's deputy finance minister, Caio Koch-Weser, he said. Most of the debt was contracted to Syria by the former East Germany for economic and especially industrial imports, he said. 

 

He said Syria halted those payments after Germany's reunification 10 years ago. During the October talks, Berlin recognized part of Damascus's claim that it had not taken delivery of part of the materials ordered from the former East Germany, the diplomat said. 

 

The debt question is expected to be raised during German Chancellor Gerhard Schroeder's scheduled visit to Damascus this Monday as part of a regional tour of the Middle East, he added. Schroder will also visit Lebanon, Syria, Jordan, Israel and the Palestinian territories 

 

The German ambassador in Syria has said Schroeder will hold afternoon talks Monday with President Bashar al-Assad and Prime Minister Mohammad Moustapha Miro. He will leave the Syrian capital Tuesday for Israel. 

 

The trade balance between the two countries largely favors Syria. Syrian exports to Germany totaled $760 million in 1999, while Syrian imports of German products hit $280 million, according to figures from the German embassy.  

 

Germany is the second largest exporter to Syria following Italy, mostly of machines, industrial materials, chemical products, cars and stainless steel. Petroleum products form most of Syria's exports to Germany, which also buys the country's cotton, textiles and agricultural goods. 

 

The largest German investor in Syria is petroleum company Veba, part of a consortium run by Anglo-Dutch group Shell, which has invested five billion dollars.  

 

In Berlin, a senior official said Thursday the government had high hopes of getting a deal on the back payments of the Syrian debt, which would unblock development aid. — (AFP, Damascus) 

 

© Agence France Presse 2000

© 2000 Mena Report (www.menareport.com)

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