Weakened by coronavirus, Cuba requests to suspend payment of its debt

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Weakened economically by the impact of the coronavirus pandemic, Cuba is asking its creditors for a break. In a letter addressed to the Paris Club, the Deputy Prime Minister, Ricardo Cabrisas requires "a moratorium for 2019, 2020, and 2021, in order to start paying again in 2022".

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The Covid-19 crisis deprives the island of its main income, including tourism , the country's second resource. In 2018, this sector, which concerns a third of private companies and around 200,000 workers, brought in around $ 3 billion ... But since March 24, everything is at a standstill.

Another important source of income is the sending of money from the Cuban diaspora to their families. However, many Cuban exiles live in the United States, where unemployment has reached new levels due to the epidemic. A situation which could deprive the island of this substantial support.

Reduction in imports

The pandemic accentuates the economic fragility of Cuba, which imports 80% of what it consumes. Without foreign currency to pay for its imports, it drastically reduced them in the first quarter. Already before the pandemic, Cuba was in great financial difficulty due to the strengthening of sanctions and restrictive measures for American travelers. Tourism fell by almost 10%.

The Deputy Prime Minister, Ricardo Cabrisas, proposes that in 2021 an analysis of the economic situation be conducted in order to assess the capacity of Cuba to honor its repayments again. By asking today for a moratorium until 2022 at the Paris Club - which brings together the 14 donor countries, including France -, Cuba wants to avoid falling into total default.

The island authorities hope to benefit from the same flexibility as the African countries with the G20. The IMF and the World Bank have pledged to support the most fragile countries, but Cuba is neither of them.

► To read also : Coronavirus: between the pandemic, the fall of tourism and sanctions, Cuba struggles

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