Deadbeat Cuba gets loan from Russia

Cuba gets another opportunity to stiff the Soviet Union, scratch that, Russia.

Russia to lend $355m to Cuba

Posted By Newsroom On 28th September 2006 @ 07:30 In Home, International | Comments Disabled

MOSCOW - During Russian Prime Minister Mikhail Fradkov’s visit to Cuba on September 28 and 29, an agreement will be signed to lend Cuba $355 million to fund the acquisition of Russian goods and services, a source from the Russian delegation to Cuba told RBC. The idea was approved by the Russian government on 14 September.

Cuba will use the tied loan to finance the acquisition of Russian machinery and equipment. “This is a pilot project to support Russian exports. If it is a success, we will consider tied loans to other countries too,” the source said.

He also said an agreement would be signed to restructure Cuba’s debt to Russia, at about $166 million. He did not specify the terms of the debt-restructuring scheme but said it would include a grace period. Cuba’s debt to the former USSR, estimated at about $26 billion, will not be discussed at the negotiations, according to the source. This, he said, opened up new opportunities for relations between the two countries.

The Cuban authorities do not recognize the Soviet-era debt. Moreover, Fidel Castro’s government stopped servicing all debt obligations to Russia back in 1999. Cuban officials said Russia owed $30 billion to Cuba. They said the debt had been caused by the abrupt severing of economic ties between Cuba and the USSR. Visiting Cuba in 2000, President Putin offered Fidel Castro the chance to settle Cuba’s debt to Russia through the Paris Club, but the Cuban leader refused, suggesting that Russia should pay $200 million in annual rent for its spy base in Lourdes. Two years later Russia left the base. More [here].