In the News

An unusual take on Debt Forgiveness

Penny Brooks

19th December 2016

Back in the Cold War era, both Cuba and what was Czechoslovakia were part of the Soviet communist bloc. With no access to what were termed the 'western currencies' - dollars, sterling and so on - they borrowed from each other, which is why Cuba now owes the Czech authorities $276m (£222m). In spite of their new openness, they are struggling to find the cash to make the payment, and have offered instead to pay it in a resource that is not so scarce - rum.

This would provide the Czech finance ministry with enough rum to last a century - which may not be the most useful of reserves. They say that they would prefer to have at least some of it paid in cash! Cuba has offered another alternative of pharmaceutical drugs, but unfortunately the Cuban medicines don't have an EU certificate so those won't fit the bill either.

Penny Brooks

Formerly Head of Business and Economics and now Economics teacher, Business and Economics blogger and presenter for Tutor2u, and private tutor

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