14ymedio, Havana, 21 May 2020 — The Cuban government has asked its Paris Club creditors to suspend payment of their debt until 2022, according to France Presse. Havana, according to sources cited by the agency, made the request through a letter addressed to the 14 countries that make up the group, asking for “a moratorium for 2019, 2020 and 2021, and to pay again in 2022.”
Deputy Prime Minister Ricardo Cabrisas signed the letter requesting an analysis next year to assess the situation in the Cuban economy to resume payment. The request for postponement is based on the blow that the Covid-19 pandemic will cause to the already faltering state finances.
In 2015, the Paris Club forgave Cuba $ 8.5 billion of its $ 11 billion in debt. The rest was restructured into payments until 2033 and investment projects on the Island.
Since Cuba suspended payments in 1986, access to international markets was closed until, in 2010, it was forgiven the outstanding debt of China, to which it owed $ 6 billion; Mexico, $ 400 million; and, finally Russia, its biggest creditor with some 35 billion dollars.
At the beginning of the year the Paris Club already demonstrated its anger at Cuba’s failure to pay between 32 and 33 million dollars in 2019. The pressures, which included the warning of a surcharge of 9%, as announced by the director general of the French Treasury and president of the Cuba Group, Odile Renaud-Basso, managed to get Cabrisas to commit to paying in May.
But the coronavirus crisis has left everything in the air. Cuba is facing an unprecedented crisis and lacks the capacity to borrow or the facility to place public debt in the markets.
The Economic Commission for Latin America (Eclac) predicts a drop in Cuban GDP of 3.7% in 2020, but many experts have warned that the figure may be double that. The strong damage to tourism due to the pandemic, the US sanctions and the suffocation of the Venezuelan regime, its main partner, put the Cuban economy in serious trouble.
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