Germany to Benefit From Debt Repayment

The German government could receive an unexpected windfall of $3 - 4 billion (€2.3 - 3 billion) for its 2005 budget, thanks to an offer by Russia to repay some of its Paris Club debts, the Financial Times Deutschland reported on Tuesday. Quoting government sources, the paper said that Moscow had offered to pay $10 billion of its outstanding debt to Paris Club creditor nations and the International Monetary Fund within the next three years. At the beginning of this year, Russia owed the Paris Club about $47 billion, $19 billion alone to Germany. But Moscow has repaid much of that during the course of the year. Russia's finances are benefiting from high inflows of foreign currency as a result of the runaway price of oil. However, the windfall gains would not help Germany bring its public deficit back within EU limits, FT Deutschland noted.