Kuwait to ask MPs to forgive Iraq debt

KUWAIT (Reuters) - Kuwait's government will present a request to parliament in its next session in October to forgive Iraq's multi-billion debt, a local newspaper reported on Thursday, citing a senior source.

The Gulf Arab state has said that it would not allow the repayment of the estimated $15 billion (8.2 billion pounds) to $16 billion debt to become a burden on Iraq, but only parliament can cancel it.

The Kuwaiti government move came after the United Arab Emirates waived Iraq's debts and Saudi Arabia pledged to do so, daily newspaper Seyassah reported the senior source as saying.

The debt represents loans Kuwait made to Baghdad in the Saddam Hussein era, mostly during the 1980-1988 Iraq-Iran war.

Local media on Thursday also carried statements from an Iraqi politician stating that Kuwait could cancel the debt.

"Our brothers in Kuwait told us that they are not demanding any debt and that there is no need to discuss this issue," the head of the Iraqi parliamentary foreign relations committee Humam Hamoudi was quoted as saying by al-Qabas newspaper.

"But the officials in the Iraqi government want to settle all the debt."

Several Kuwaiti deputies oppose debt forgiveness as many in Kuwait are still bitter about Saddam's 1990 invasion of their country.

The United States has, since invading Iraq in 2003 and toppling Saddam, been pressing its Arab allies to forgive Iraq's debts and restore top-level diplomatic ties.