7 Aug 2013

France writes off huge New Caledonia nickel debt

2:59 pm on 7 August 2013

The French government has decided to forgive New Caledonia a debt of 385 million US dollars dating back to the 1970s.

This was disclosed by the French High Commission in Noumea and follows last month's visit to the territory by the French prime minister, Jean-Marc Ayrault.

New Caledonia had contracted this debt through two protocols in 1975 and 1984, under which France underwrote the nickel price to ensure the territory had a minimum level of income from its mining sector.

The previous French provision was to arrange a repayment in line with the territory's ability to pay.

The write-off has surprised observers, with one suggesting Mr Ayrault wanted to follow in the footsteps of two of his predecessors, Michel Rocard and Lionel Jospin, who were signatories of the key autonomy accords of 1988 and 1998.