All of Russia's Soviet-era debt should be written off as a way of persuading Moscow to end troubling nuclear cooperation with Iran, an influential security advisor to the U.S. presidential administration said Wednesday.
Speaking by telephone from his home in Maryland, Richard Perle said the first step would be to get the U.S. government and U.S. banks to forgive any Soviet debt they held.
"Then we could turn to European governments, and they could put pressure on their banks," he said. "We would take it one country at a time."
But finance experts were skeptical about the plan, saying the U.S. government would not be able to force private European banks to part with billions of dollars in outstanding loans.
Perle, who is chairman of the Defense Policy Board, which advises the U.S. defense secretary, first floated the idea of a total write-off of Russia's Soviet-era debt last summer, but did not link it to Iran at the time.
Now that relations between Washington and Moscow have grown warmer in the wake of the Sept. 11 attacks, Iran remains perhaps the most contentious issue separating the two countries and is sure to be discussed at the upcoming summit between Presidents George W. Bush and Vladimir Putin.
The United States has accused Russia of aiding Iran's nuclear, ballistic missile, biological and chemical weapons programs and has called on Moscow to end this sort of cooperation. Russia, which is building an $800 million civilian nuclear reactor for Iran at Bushehr, has denied that it is contributing to Tehran's weapons program.
Speaking Tuesday at the Council on Foreign Relations in Washington, Perle indicated that he understood the importance of trade with Iran to the Russian economy and said the United States should be prepared to "share the burden" if Moscow were willing to restrict cooperation with Tehran.
But with Russia's economy still buoyed by high oil prices, foreign debt has ceased to be an effective bargaining chip, said Maxim Kulikov, director of the Moscow-based Economic Expert Group. Moreover, the debt is owed largely to European nations.
"Why would Europe just write off an additional source of funds when Russia is fully capable of paying these debts according to schedule?" he said. "If they were going to forgive these debts, they should have done so when Russia was having trouble with payment."
As of late last year, Russia's Soviet-era debt -- both sovereign and private -- totaled $88 billion. The lion's share is owned to the Paris Club of creditor nations and the London Club of private creditors. A third is owed to Germany. Only 9 percent of the overall sum is owed to U.S. government lenders.
Deutsche Bank spokesman Detlef Ramsdorf said the idea of the German government intervening in the German banking industry was ridiculous.
"We are a free country," Ramsdorf said by telephone from Frankfurt. "The government has no right to expropriate any private business or take money from a private bank."
Perle argued that those who lent money to the Soviet regime knew what they were getting into.
"They lent money for political reasons, not to get a rate of return," he said.