US embassy cable - 05WARSAW3010

C O N F I D E N T I A L WARSAW 003010 
 
SIPDIS 
 
STATE FOR EUR/NCE TARA ERATH AND MICHAEL SESSUMS 
STATE FOR NEA/I-ECON LAIRD TREIBER 
PARIS FOR OTTO VAN MAERSSEN 
TREASURY FOR OASIA MATTHEW GAERTNER AND ERIC MEYER 
FRANKFURT FOR TREASURY JIM WALLAR 
USDOC FOR 4232/ITA/MAC/EUR/JBURGESS 
 
E.O. 12958: DECL: 08/03/2015 
TAGS: EFIN, PREL, IZ, PL, Iraq Debt Forgiveness 
SUBJECT: PRESS REPORTS WRONG: POLAND AND IRAQ HAVE NOT 
REACHED DEAL ON IRAQI DEBT 
 
REF: WARSAW 0135 
 
Classified By: A/DCM Lisa Piascik, reasons 1.4 (b) and (d) 
 
1. (SBU) On the heels of Prime Minister Marek Belka's July 
visit to Baghdad, several Polish press outlets reported that 
Belka promised the Iraqi government forgiveness of 80 percent 
of Iraqi debt, in line with the Paris Club's agreement. 
However, Poland's Iraq Task Team at the Ministry of Foreign 
Affairs and contacts at the Ministry of Finance told econoff 
that the press reports were inaccurate and did not reflect 
the reality of Belka's meetings with the Iraqi Transitional 
Government or the position of the Polish government in 
regards to Iraqi debt. 
 
2. (C) Pawel Herczynski from Poland's Iraq Task Team at the 
MFA said that while Belka and the ITG discussed Iraqi debt in 
Baghdad, no commitments were made.  Instead, Belka told the 
ITG that Poland is in favor of Iraqi debt relief, but needs 
to consider the matter further.  Belka asked the ITG to 
formulate possible "solutions" to help alleviate any public 
backlash the Polish government might incur by forgiving Iraqi 
debt, such as offering commercial deals to Polish companies 
in the oil and gas sectors and donating ground for a new 
Polish embassy in Iraq.  Herczynski said the meeting resulted 
in no finalized quid pro quos, as the Polish press articles 
suggested.  (The press articles intoned that an Iraqi pledge 
to not issue claims against Poland for damages to the Babylon 
archeological site was tied to an agreement on debt relief.) 
 
3. (SBU) Ministry of Finance contacts explained that the 
current Polish government is in favor of relieving Iraqi debt 
and views the Paris Club agreement as a model that it might 
follow.  However, the Council of Ministers has decided not to 
enter into any agreements in the final days of the current 
government that would not be finalized before the expected 
change of power following Polish elections this fall. 
Rather, the current government will recommend to the incoming 
one to conclude some type of debt relief for Iraq, but will 
not take any binding actions in that regard, according to 
officials at the Ministry of Finance.  In the interim, MoFin 
specialists are continuing to hold working-level discussions 
and exchanges of letters with Iraq to determine the actual 
amount of Iraqi debt held by Poland. 
 
4. (C) Comment.  The Ministry of Finance offered one 
explanation why the current Polish government has decided to 
abstain from finalizing an agreement on Iraqi debt despite an 
internal consensus that it is in Poland's interest to do so. 
Herczynski candidly offered another explanation when he said 
that forgiving nearly a billion dollars in debt would be 
"political suicide" during the current election season.   As 
such, it appears that making the final (and potentially 
sensitive) decision on this issue will fall on the future 
government.  End comment. 
 
ASHE