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How the Iraq deal was done

Mahdi: instrumental in getting Iraq's debt
repayments cut

Iraq's Paris Club deal was exceptional on many levels – not least that it was mainly worked out in capitals far away from Paris. The deal arrived in November 2004 – more than a month ahead of schedule – thanks to some fortuitous timing. Iraq's Paris Club meeting happened to coincide with both a G20 meeting in Berlin and an Asia-Pacific Economic Cooperation (Apec) meeting in Santiago, which gave the mid-level finance ministry functionaries in Paris the ability to easily escalate negotiations to the finance-minister or even head-of-state level.

There were enormous differences going in to the meeting, with Iraq and the US wanting a 95% haircut while France and Russia were thinking more along the lines of 50%. Such huge differences between Paris Club creditors are almost unheard of, and were almost sufficient to stop the meeting from even starting.

But in the end, on November 17, the meeting convened, and Adil Abdul Mahdi, then Iraq's finance minister, kicked it off with an appeal to the assembled governments' wallets.

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