- The restructuring will contribute to normalizing and developing bilateral economic and financial relations
The vice president of the Council of Ministers of Cuba, Ricardo Cabrisas Ruiz, and the acting Minister of Economy and Competitiveness, Luis de Guindos, have chaired the signing in Madrid of the agreements to restructure the Cuban debt in the medium and long term with our country. Cuba's debt to Spain amounted to 2,444.05 million euros at the end of October 2015 and was fully unpaid. This was an obstacle to the deepening of bilateral relations between Spain and Cuba.
Spain wanted to provide a solution to this situation and in June 2015, talks were launched at a technical level to achieve this. The objective was to normalize economic and financial relations with the island and to promote the opening and economic development of Cuba. Last November, during a visit by Minister De Guindos to Cuba, a bilateral agreement was signed for the restructuring of short-term debt that amounted to 201.5 million euros.
The agreements signed today involve the restructuring of medium and long-term debt and have been negotiated within the Paris Club multilateral framework. The Group of Creditors of Cuba (GAC), integrated in the Paris Club, is the forum established for the negotiation of the medium and long-term debt. The Club has been the established forum for the negotiation of the medium and long term with Cuba. Spain has promoted these negotiations and has played a determining role in the multilateral solution to Cuban debt.
On December 12, 2015, an agreement was reached between Cuba and the members of the GAC that established the financial conditions that each debtor must apply to the restructuring and cancellation of the debt.
These conditions are as follows:
- The repayment of the principal and contractual interests, which in the case of Spain amount to 750 million euros, will be made within 18 years.
- Forgiveness of default interest will be made in proportion to the payment of agreed refunds. In the case of Spain, these interests amount to 1,492.3 million euros.
These conditions are reflected in the Spanish case in two agreements signed today. One of them with the Spanish Export Credit Insurance Company (CESCE) and the other with the Official Credit Institute (ICO), entities that are assigned to manage these debts.
Additionally, the commitment reached within the GAC provided for the option for creditors to voluntarily agree to additional forgiveness through the signing of a debt conversion program. In development of this possibility and in response to the request of the Cuban Government, both Governments have agreed to launch a debt conversion program for a total of 375 million euros destined to finance economic and social development projects prioritized by Cuba and interest for both countries.
