The Cuban government has successfully negotiated a new agreement to refinance its debt with the Paris Club, expressing gratitude for the understanding shown regarding the island's challenging economic conditions. This agreement was signed in Havana by Vice Prime Minister Ricardo Cabrisas Ruiz and Bertrand Dumont, President of the Paris Club, as announced by the Cuban regime on X. The post, accompanied by a photo of representatives from both parties, read, "Cuba thanks member countries for understanding the difficult economic situation."
Despite facing economic challenges and international sanctions, Cuba has remained committed to honoring its financial obligations, albeit with revised timelines. Since 2023, Cuba has been seeking to renegotiate its debt, citing the need for an extension due to an "extraordinarily complex economic situation." At that time, Cabrisas attributed the delays in payments to Cuba's inclusion on the list of State Sponsors of Terrorism, which hampers access to international financing. This new agreement comes just three days after U.S. President Joe Biden removed the island from that list.
The Cuban government has restructured its debt with the Paris Club several times in recent years. According to official reports, by the end of 2022, Cuba's external debt with the Club was $4.827 billion, making it the second-largest debt in Latin America, surpassed only by Venezuela. Despite the sizable debt, Cuban authorities emphasize their ongoing commitment to meeting their obligations.
The Paris Club, a forum of 19 industrialized countries, has historically played a crucial role in the debt restructuring of nations facing financial difficulties. Its members include countries such as France, Spain, Italy, Japan, and the United Kingdom, among others. In 2021, Cuba secured the forgiveness of a portion of its debt, allowing the country to continue its financial restructuring strategy while grappling with internal crises and international sanctions. Now, the agreement with the Paris Club provides a temporary relief in a more favorable economic context for the regime, which has seen several sanctions lifted during Biden's final week in office.
Cuba's Debt Restructuring with the Paris Club
Why did Cuba need to renegotiate its debt with the Paris Club?
Cuba sought to renegotiate its debt due to an "extraordinarily complex economic situation" and difficulties accessing international financing, partly because of its previous designation as a State Sponsor of Terrorism.
What is the Paris Club?
The Paris Club is a forum of 19 industrialized countries that plays a significant role in restructuring the debts of countries facing financial hardship. Its members include France, Spain, Italy, Japan, and the United Kingdom, among others.
How much is Cuba's debt with the Paris Club?
By the end of 2022, Cuba's external debt with the Paris Club was reported to be $4.827 billion, making it the second-largest debt in Latin America, trailing only Venezuela.