Schroeder to resume financial assistance to Syria

Published October 31st, 2000 - 02:00 GMT

German Chancellor Gerhard Schroeder is expected to announce during his visit to Damascus on Monday a resumption of financial development assistance for Syria, a German diplomatic source told AFP.  

 

"We are shortly expecting Schroeder to announce a resumption of financial cooperation with Syria, which was suspended 10 years ago because of debt problems," said the diplomat, who requested he not be named.  

 

The aid will resume as soon as the countries sign an accord to reschedule Syria's about 1.25 billion euro (one billion dollar) debt to Germany, he added. A European diplomatic source told AFP on Thursday a preliminary accord had been negotiated for the debt to be repaid over 20 years, starting with a grace period of five years during which interest will not be charged. 

 

The outlines of the accord were reached during talks early this month in Damascus between government officials and visiting German Deputy Finance Minister Caio Koch-Weser, the European source said. 

 

Most of the Syrian debt was incurred to the former East Germany for economic and especially industrial imports, he added. Syria stopped its payments after the reunification of Germany a decade ago. During the talks earlier this month Damascus claimed it had not taken delivery of some imports ordered from the former East Germany, the European source said. 

 

The official Syrian daily ath-Thawra said Sunday that Germany was going to "exonerate Syria of part of the debt, and also furnish aid of 77 million marks (40 million euros/$34 million) for the Syrian program to fight unemployment." Syria launched a 50 billion Syrian pound (one billion-dollar) program at the start of this month to create 440,000 jobs. 

 

According to the German embassy in Syria, Schroeder, who kicked off a six-stage tour of the Middle East on Saturday, will hold meetings later Monday with President Bashar al-Assad and Prime Minister Mohammad Mustapha Miro. He will leave Damasacus Tuesday for Israel. 

 

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

 

Germany is the second largest exporter to Syria after Italy, and most of its sales are in machines, industrial materials, chemical products, cars and stainless steel. Petroleum products make up most of the Syrian exports to Germany, which also buys cotton and textile products from the country. 

 

The largest German investor in Syria is petroleum company Veba, part of a consortium run by Anglo-Dutch group Shell, which has a total investment of five billion dollars in the country. — (AFP, Damascus) 

 

© Agence France Presse 2000

© 2000 Mena Report (www.menareport.com)

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