Published: Sun, December 18, 2016
Economy | By Melissa Porter

Cuba proposes to use rum to pay back Czech debt

Zurovec did, however, add that the Czech Republic would prefer the debt be paid at least partially in cash.

Cuba has chose to try and pay back it $375m debt to the Czech Republic in liquid currency after offering rum to the European country.

According to authorities in the Czech Republic, the government of Cuba has proposed resolving a Cold War-era debt by paying the Czechs in a treasured Cuban commodity: rum.

But the country's drugs lack European Union certification, so rum - only worth £1.6 million in imports to the Czech Republic every year - could be the best option.

Cuba has proposed a novel way of spiriting away its enormous global debts - paying them off in bottles of rum.

Vaidisova said the two parties were still debating exactly how much Cuba owes.

If the entire debt were repaid in rum, the Czechs would have enough rum for 130 years at this pace. Cuba has rum, and its pharmaceutical offerings are interesting-Cuba might even have a cure for lung cancer. Cuba regularly exchanged its sugar for Soviet fuel, for example.

In the 1970s and 1980s, Cuba took out development loans from non-American banks but defaulted in 1986. As in the case of Cuba, the debt was contracted during the communist regime.

The U.S. reestablished formal diplomatic relations with Cuba previous year, but the country is still cut off of most global financing. France and Germany are among the biggest markets for the Cuban rum brand.

Russian Federation has written off 90%, or $32 billion, of Cuba's debt.

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