The Finance Ministry announced on 18 August that it had agreed a deal to write off about 80 per cent of its estimated $2,000 million debt to the Romanian government.Under the agreement, Bucharest will reduce the debt burden in three phases. The first phase will see $760 million cancelled. The second tranche will be written off once Iraq signs a formal stand-by arrangement with the IMF. Phase 3 will see more debt cancelled on completion of a stand-by arrangement in 2008. The remainder, totalling about $500 million, will now be paid back over 23 years, which includes a grace period of six years. The deal is the first to be signed by a non-Paris Club member. In 2004, the Paris Club – which includes the US, Japan, Russia, France and the UK – cancelled about $32,000 million of Iraq’s debt. Iraq owes about $70,000 million to non-Paris club nations (MEED 29:7:05).