Russia and 18 creditor governments agreed today to delay payment for 15 to 20 years on $8 billion of Soviet-era debt that falls due this year and next.
Russian Finance Minister Mikhail Kasyanov and Francis Mayer, chairman of the creditor government group, known as the Paris Club, said the agreement was reached after four days of talks. Negotiations on the rest of the $40 billion that Russia owes to the Paris Club will begin next year.
In the past year Russia missed more than $2 billion in payments on debt amassed before the fall of communism in 1991.
Russia owes a total of about $140 billion to a combination of foreign banks and governments, about half of which is a legacy of the Soviet era. Restructuring is vital for the government to keep its promise to pay Russian debt accumulated after 1991, following last year's Treasury debt default.
"We have agreed to reschedule the debt over a long period of 15 to 20 years," Mayer said. "More comprehensive solutions are going to be sought by the Paris Club and Russia, with discussions aimed at beginning in the fall of 2000."
The International Monetary Fund's approval Wednesday of a new $4.5 billion, 17-month loan was a precondition for Russia to pursue the debt talks this weekend.
The government hasn't paid any Paris Club debt since its default last year, and said it included only minimal interest payments on Soviet debt in its draft 2000 budget.