By Armen Zakarian
After months of negotiation the governments of Armenia and Georgia agreed Monday to re-structure Tbilisi’s $20 million debt to Yerevan. Armenian Finance Minister Vartan Khachatrian and his Georgian counterpart, Zurab Noghaideli, reached the deal following talks in the Armenian capital.
The agreement postpones repayment of the Georgian debt until the year 2021, setting a two-year grace period. The two sides have yet to agree on its annual interest rate. Georgia is ready to service the debt at three percent per annum, while Armenia insists on four percent. But Khachatrian said the differences will be overcome soon.
$10 million of the sum originally fell due this year. But Tbilisi suspended Armenian debt servicing last June after the failure of the first round of negotiations with Armenian officials.
The bulk of Georgia’s debt involves compensation for the theft and loss in the early and mid-1990s of energy resources supplied to Armenia.
Monday’s agreement follows recent similar debt re-structuring arrangements between Georgia and several other states, including neighboring Azerbaijan and Turkey. The debt-burdened Georgian government earlier this year asked the so-called Paris Club of rich donor nations to help it reschedule its financial obligations.