Debt Relief Agreement Signed in Ethiopia  

The Minister of State at the Federal Foreign Office, Kerstin Müller, and the Ethiopian Minister of State for Finance and Economic Development, Dr Mulu Ketsela, signed a debt relief agreement for a total of around 67 million euro in Addis Ababa on 13 December 2004. To mark the signing ceremony, which took place in the presence of the two Heads of State, President Girma Woldegiorgis and German President Horst Köhler, the Minister of State made the following statement:

"By granting this debt relief the Federal Government is supporting Ethiopia's economic reform process. We have concluded the agreement on the understanding that the funds released will be used to fight poverty.

Combating poverty is a key element of the Millennium Development Goals, which we, like Ethiopia, are committed to achieving. If economic growth continues at its current rate, Ethiopia has good prospects of reaching the goals by 2015.

I welcome Ethiopia's increased investment in education, agriculture and infrastructure, which is laying the foundations for sustainable development and the reduction of poverty in the country. We will continue to support Ethiopia as our traditionally close and amicable relations enter a second century."

Ethiopia succeeded in fulfilling the eligibility criteria for the Cologne Debt Initiative in April 2004. The basis of the agreement is the 13 October 2004 arrangement by all affected Paris Club creditors to grant Ethiopia debt relief on 90% of state-guaranteed debt from export transactions. The German Government is willing to waive 100% of the country's debts, as Federal Chancellor Gerhard Schröder announced at the EU-Africa Summit in Cairo in April 2000 and confirmed during his visit to Ethiopia in January 2004. After cancelling financial cooperation liabilities of approximately 54 million euro in 1990, the Federal Government has now forgiven Ethiopia a total of around 197 million euro in commercial debts since 1993.

December 14,  2004

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