US embassy cable - 05BRATISLAVA242

UNCLAS BRATISLAVA 000242 
 
SIPDIS 
 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON, EFIN, EAID, LO 
SUBJECT: DEBT RELIEF FOR POOR COUNTRIES 
 
REF: SECSTATE 31823 
 
SENSITIVE BUT UNCLASSIFIED - PROTECT ACCORDINGLY 
 
1. (SBU) On March 1, the post delivered talking points per 
reftel to the Ministry of Finance's (MOF) Department of 
Coordination for Relations with the EU.  Representatives of 
the MOF replied several weeks later and expressed a great 
deal of enthusiasm for a 100 percent debt relief program on 
all official bilateral pre-cut-off-date (pre-COD) claims on 
Heavily Indebted Poor Countries (HIPCs).  The MOF is 
currently drafting Slovakia's position towards the World 
Bank's International Development Association (IDA-14) 
replenishment, as well as Britain's proposals for gold sales 
and the creation of the International Finance Facility (IFF) 
to increase development assistance.  The position paper is 
subject to approval by the Slovak cabinet, which has already 
indicated support for IDA-14, but a negative opinion towards 
the two British proposals. 
 
PRE-COD CLAIMS 
-------------- 
2.  (SBU) Currently, Slovakia has outstanding pre-COD (pre- 
1999) claims against Laos, Nicaragua, Myanmar and Sudan. 
Settlement of the Laotian debt followed an intergovernmental 
agreement between Slovakia and Lao People's Democratic 
Republic.  The claims against Nicaragua and Myanmar are 
being settled on the basis of mandate (factoring) contracts. 
The MOF is contemplating reopening these contracts to 
provide 100 percent debt relief, and it also intends to 
propose that the GOS forgive the debt against Sudan in line 
with the EU commitment.  Sudan has not replied to the GOS's 
inquiries. 
 
IDA-14 
------ 
3.  (SBU) Slovakia contributed a combined SDR 1,320,000 (USD 
2,013,330) to IDA-13 in 2003 and 2004.  The MOF has proposed 
that the GOS accept a 30 percent increase above its IDA-13 
contribution as agreed upon during the IDA-14 meeting in 
December 2004.  The ministry proposed that this amount be 
paid in installments over a three-year period starting in 
2006.  Slovakia will also contribute to the repayment of all 
HIPC's debts that were forgiven in a 1999 decision in 
proportion to its voting rights. 
 
GOLD SALES 
---------- 
4.  (SBU) The MOF agrees with the USG that sales of IMF gold 
reserves are unnecessary and could harm the IMF's financial 
viability.  According to the Slovaks, the "cold" response of 
central banks in general to the British proposal for gold 
sales suggests that it is unlikely to be supported by the 
IMF Board. 
 
INTERNATIONAL FINANCE FACILITY (IFF) 
----------------------------------- 
5.  (SBU) Representatives of the MOF expressed concern that 
the IFF would negatively impact the World Bank's budget 
after 2015 when IFF must be paid.  They were also concerned 
about the IFF's influence on global interest rates and its 
accounting procedures.  Slovakia will not present its 
position regarding the French and German proposals for 
global taxation (taxes on kerosene, aviation fuel, air 
tickets, etc.) until an analysis detailing the anticipated 
revenues and impact on air transport is completed. 
THAYER 
 
 
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