U.S. forgives $4.1 billion in Iraq debt

WASHINGTON -- The United States on Friday completely forgave $4.1 billion in debt Iraq owed it and urged other nations not part of an international debt relief agreement to follow suit.

Both Secretary of State Colin Powell and Treasury Secretary John Snow hailed the move as an important contribution to the future of Iraq and its people.

Snow, Powell and Iraqi Finance Minister Adil Abdul al-Mahdi signed the agreement in a ceremony at the State Department.

Al-Mahdi thanked the U.S. government and its people, describing debt relief as Iraq's "second liberation after the overthrow of Saddam Hussein."

In agreeing to forgive all of the debt Iraq owes it, the United States is going beyond the 80 percent reduction of $38.9 billion in debt agreed to by the Paris Club of international lenders in November.

The Paris Club includes European countries, the United States, Japan, Russia, Canada and Australia. Iraq owes another $80 billion to various Arab governments, mainly Saudi Arabia and Kuwait.

It was this debt that Powell and Snow referred to in their remarks.

"I urge Iraq's other creditors to work quickly in forging agreements like this one to reduce Iraq debt," Snow said.