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U.S. urges Putin to drop Iraq debt

Baker, Chirac
Baker with French President Jacques Chirac after talks in Paris.

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MOSCOW, Russia -- James Baker, U.S. President George W. Bush's envoy to Iraq, has arrived in Moscow in an effort to persuade Vladimir Putin to write off the $8 billion debt run up by Saddam Hussein.

But before Baker left London, following a brief meeting with UK Prime Minister Tony Blair on Wednesday, the Russian president restated his opposition to the U.S.-led war in Iraq.

Putin said Thursday that Russia supported the U.S.-led war on terrorism, namely because it also faced a Muslim insurgency in the breakaway republic of Chechnya.

However, he said that no international terrorists were in Iraq during Saddam's regime and the Iraq war was unjustified because the United Nations Security Council did not approve it.

"Everything that is done without the U.N. Security Council's sanction cannot be recognized as fair or justified," Putin said in an annual live televised question-and-answer session, at which time he also confirmed he would seek a second term as president. (Full story)

While Putin was speaking, Baker -- Bush's special envoy for Iraqi reconstruction -- was preparing to meet the Russian president in Moscow after discussing with western leaders Iraq's $120 billion foreign debt.

On Tuesday the governments of the United States, France and Germany issued a joint statement in which they agreed on a plan to provide the fledgling Iraqi government with "substantial" debt relief. (Full story)

The amount of the debt reduction will be subject to "future agreement" between the countries, the statement, released Tuesday, said.

The Paris Club, an informal group of 19 creditor nations, has been discussing ways to relieve the debt burdens of nations, including Iraq.

The secretary-general of the Paris Club told CNN that Germany was owed about $5 billion of that debt, including arrears. Another $5.5 billion including arrears is owed to France, and $4.4 billion is owed to the United States.

But CNN Correspondent Ryan Chilcote said that while Baker had "breezed through" his meetings with Western leaders who had pledged support, the Kremlin would be his biggest test.

If Russia is to write off the estimated $8 billion that Iraq ran up -- mainly from arms sales -- it would want influence in the rebuilding of Iraq, Chilcote said.

The announcement last week by the Pentagon that companies from countries that opposed the war -- including Russia -- could not bid for $18 billion in Iraqi reconstruction contracts had complicated the issue, Chilcote added.

"If Russia is not going to have an influence, many say there's no good reason to drop the debt."


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