DEAUVILLE, France, 18 May 2003 — There will be no write-off of Iraq’s debts, German Finance Minister Hans Eichel told journalists yesterday at the conclusion of the meeting of finance ministers of the G-8 industrial nations in the French resort of Deauville.

“There is simply no margin to write off Iraq’s debts,” Eichel said.

Late Friday, after the working dinner that opened the conference, officials accompanying US Treasury Secretary John Snow said he would ask G-8 countries to write off debt owed by Baghdad, which has been estimated at about $127 billion.

Eichel said that the issue would be discussed at the Paris Club, which unites the world’s creditor nations, only when a stable administration was in place in Iraq.

Snow told journalists that finance ministers had agreed that Iraq cannot be expected to begin servicing its debt until “at least the end of 2004”.

Regarding Iraq’s debt, Snow said, “We’re mystified as to just how big this animal is”, adding that the G-8 finance ministers had asked the International Monetary Fund (IMF) to assess the precise amount.

The need for countries to donate funds to rebuild Iraq was also discussed, Snow said. To that end, the IMF and the World Bank agreed to carry out an assessment of Iraq’s needs.

Snow said that a donor’s conference could be held after this assessment has been carried out, “perhaps later this year”.

The most pressing issue discussed at the conference, all participants agreed, was economic growth.

Lost for a quick fix for economies on the brink of recession, the world’s top finance ministers yesterday kept confidence in recovery but looked to deep-seated reforms for rich and poor regions as the remedy.

Meeting for the first time since the end of the war in Iraq, ministers from the Group of Eight devoted their time to medium-term issues and links with the developing world, in preparation for a summit in two weeks time in Evian.

Fears of imminent recession in many G-8 countries, concerns about Japan-style deflation spreading and the slide in the US dollar drew little direct response.

“We’re optimistic more than anything else,” French Finance Minister and G-8 host Francis Mer told the closing press conference. Currency markets — where the dollar has fallen to near four-year lows against the euro and two-year lows against the yen — were not mentioned in the communique and this is expected to be noted by markets wary of G-8 displeasure over recent moves.

Mer said currencies were part of the general discussion and there was a standing agreement to “closely monitor” and cooperate if foreign exchange rates moved out of line with fundamental economic trends.

The statement at the end of the two-day gathering yesterday provided a “to do” list of ongoing reforms for each country to pursue in order to create a better environment for the private sector to lead economic recovery.

The G-8 said there was optimism economies would improve soon without the need for any emergency action and officials told reporters there was some hope business and consumer confidence would improve following the end of the war in Iraq.

Mer, who said earlier in the week the ECB had room to cut interest rates, said the G-8 agreed inflation was largely behind them. He also said dire first-quarter economic readings from at least three of the G-8 last week focused too much on the past.

“The indicators which are in the red tell you only about the past. You don’t drive a car solely looking in the rear mirror.”

The G-8 countries — the United States, Canada, Japan, Italy, Britain, Germany, France and Russia — said dangers to global growth and prosperity were receding, even if many challenges remained.

The statement said: “We are strengthening our commitments to structural reforms and sound macroeconomic policies.”

Snow put it more bluntly when he said: “Growth in the major economies is simply not what it could be. We need to do more to ensure a robust recovery.”

Britain’s chancellor of the exchequer, Gordon Brown, struck a more positive note and said he saw more grounds for optimism in stabilizing oil prices, rising stock prices and governments’ commitments to reform.

“This was the strongest statement yet at a G-8 on the need for reform,” added Brown, drawing encouragement from European economic plans as he returns home to a critical cabinet debate on whether the UK should join the euro. “Europe is facing up to the need for reform.”

The US said it would encourage job creation by urging more savings and investment by individuals and companies. European nations said they would continue to work for more flexible economies via reforms of labor, product and capital markets.