U.S. Forgives $4.1B of Iraq's Debt

The United States on Friday completely forgave $4.1 billion in debt Iraq owed it and urged other nations not part of an international debt relief (search) agreement to follow suit.

Both Secretary of State Colin Powell (search) and Treasury Secretary John Snow (search) hailed the move as an important contribution to the future of Iraq and its people.

Snow, Powell and Iraq's Finance Minister Adil Abdul al-Mahdi signed the agreement in a ceremony at the State Department.

Al-Mahdi thanked the U.S. government and its people, describing debt relief as Iraq's "second liberatioris Club of international lendersin November.

The Paris Club includes European countries, the United States, Japan, Russia, Canada and Australia. Iraq owes another $80 billion to various Arab governments, mainly Saudi Arabia and Kuwait.

It was this debt that Powell and Snow referred to in their remarks.

"I urge Iraq's other creditors to work quickly in forging agreements like this one to reduce Iraq debt," Snow said.

He also urged Iraq to move quickly in negotiating and implementing an IMF (International Monetary Fund) standby agreement, which will trigger the full amount of debt reduction agreed on by the Paris Club.

"This agreement shows our unwavering commitment to the Iraqi people and their efforts to achieve sustainable reforms and stability in their country," Snow said.