UK calls on G8 to erase tsunami nations' debt

CHANCELLOR of the Exchequer Gordon Brown has today proposed that the G8 group of industrialised nations pushes for an immediate moratorium on debt repayments from countries hit by the tsunami disaster in the Indian Ocean.

The move confirms a Government pledge over the last few days that it would lead a drive to secure debt relief for countries devastated by the tsunami disaster. Speaking on BBC radio this morning, the Chancellor said he wanted the moratorium to take effect 'immediately'.

He declared: 'What we are suggesting is an immediate moratorium on debt repayments from the afflicted countries. That would then lead to an analysis of the debt needs of these countries with the possibility of some write-off of debt, and at the same to ensure that the money goes to the areas and people in greatest need in these countries.'

Treasury officials confirmed yesterday that the Government will use its presidency of the G8 group of industrialised nations to help provide long-term debt assistance. Officials said an agreement on a long-term package of assistance could be announced within weeks.

The Chancellor is said to have held talks with other G8 finance ministers on a moratorium on all debt repayments for the affected countries. Germany has already said it would propose a debt moratorium for Indonesia and Somalia. And France is also thought to support the plan. US President George Bush said he was open to all requests for aid, including Germany's proposal.

The plans were revealed as the Government vowed to match the £60m donated by the British public after the tsunami disaster. Foreign Secretary Jack Straw said he was in 'no doubt' the Government would match the 'enormous generosity' of the public and said there was no limit on the amount it would give.

The Government has already committed £50m in aid to the disaster fund but it has faced calls to give even more. Asked if the Government would match the sum pledged by the public, Mr Straw said: 'I am almost certain we will do in the end.'

International government donations and pledges have now reached more than £1.5bn. At least £4.5m has been raised by Oxfam GB and a further £3m has been donated to the Disaster Emergency Committee (DEC) and Oxfam appeal through the shops, a spokesman said.