Cuba Reported To Owe More Than US$2.1 Billion To Spain- And Expectation The Amount Will Increase In 2021, 2022, 2023. Cuba Companies Reported Seeking 365 Days To Pay Invoices.
/Diario de Cuba
Madrid, Spain
26 October 2021
Spain indefinitely postpones the collection of the amount owed by the Cuban Government
The Government of Spain would have indefinitely postponed the collection of the debt that Havana and Caracas have with Madrid, and amounting to 1,937.55 million euros and 213.37 million, respectively.
According to a response published by the Ministry of Economic Affairs in the Transparency Portal, website dependent on the Spanish Ministry of Territorial Policy and Public Function, and cited by the local media OK Diary, “As of the closing date of the last full fiscal year (December 31, 2020), Spain had debt as creditor against Cuba for an amount of 1,937.55 million euros and against Venezuela for an amount of 213.37 million of euros”.
In the response that appeared on that website, it would also be indicated that Madrid approved a moratorium on the debt. “On June 10, 2021, in the context of the Covid-19 crisis, an addendum to the 2015 multilateral agreement of Cuba was signed. Said addendum, which was again negotiated and agreed at a multilateral level, supposes the rescheduling of certain debt maturities, without implying any reduction “, the document would specify, dated September 30.
OK Diary He assured that in the case of Venezuela the negotiations do not even exist. “Since 2004 there has not been any type of negotiation for the relief of the debt held against that country, and therefore no multilateral or bilateral debt relief agreement has been signed,” the General Secretariat of the Treasury and Financing would have contributed International Ministry of Economic Affairs itself. The entity would not have responded to other points of the request for information due to “confidentiality” issues, according to the Spanish media, after explaining that debts between countries are negotiated in the Paris Club.
“Spain has been, since 1978, a member of the Paris Club (a forum in which most of the main sovereign creditors are integrated and whose main objective is to coordinate the negotiation of sovereign debt relief treatments)”, the answer would indicate. “As a member of the Paris Club, Spain undertakes to respect its basic principles of operation. One of these principles refers to the confidentiality of deliberations, which also extends to the multilateral agreements reached by the members of the Club with debtor countries to the treatment of its external debt “, they would have added.
Last week, The Reuters agency reported that Havana reached an agreement with the Paris Club to postpone until next year the annual payment of its debt, which expires next November., in what constitutes another sign of how empty the coffers of the Cuban regime are. The Reuters agency spoke with diplomats from five of the creditor governments, who confirmed the agreement. Neither the Cuban government nor the Paris Club made comments on the matter.
A historic agreement with the Paris Club in 2015 forgave $ 8.5 billion of the $ 11.1 billion in debt that Havana defaulted in 1986, when Fidel Castro unilaterally decided to declare it unpayable and uncollectible. Following that agreement, Havana agreed to reimburse the remainder in annual installments until 2033, but only partially met its obligations in 2019 and defaulted last year. The broad lines of an amended agreement, drawn up between the parties in June and not previously reported, call for the resumption of payments in 2022 and the adjustment of the payment schedule, diplomats who requested anonymity said.
In June, the parties indicated in a statement that “this agreement gives the Republic of Cuba more time to meet various payments owed under the 2015 Agreement, while maintaining the current value of these amounts.” Havana is now about $ 200 million behind in payments, including this year, estimated diplomats. It is unclear whether sanctions will be applied, as the novel coronavirus pandemic crisis has prompted lenders to waive other debtor countries’ fees.
During the last decade, Havana also restructured its debt with holders of commercial debt from Russia, China, Germany, Mexico and Japan. “I understand that most of those payments are also on hold,” said another diplomat, and a colleague seconded that view.
The Cuban government’s foreign exchange earnings fell by about $ 4 billion as of 2020 and the import of basic goods and inputs for agriculture and production in general plummeted almost 40% as a result of the sanctions approved by the Trump Administration. , assured Havana. The island’s economy contracted 10.9% last year and another 2% through June, compared to the same period in 2020, resulting in a worsening shortage of food, medicine, and other basic goods.
Under the original Paris Club agreement, as seen by Reuters, interest was forgiven until 2020, and after that only 1.5% of total outstanding debt remains. Part of that money owed was assigned to funds for investments in Cuba. Diplomats who spoke to Reuters said they did not expect any significant changes to that part of the agreement.
Cuban authorities last reported an external debt of $ 18.5 billion in 2018, and experts say it has risen since then, especially for providers and investment partners that reported serious payment problems as early as 2018. The country did not He is a member of the International Monetary Fund or the World Bank.
