Bulgaria would receive $360 million from a total of $1.86 billion that Iraq owes the country, Dnevnik daily reported. The money would be transferred by mid 2008.

This was announced on November 10 by Finance Minister Plamen Oresharski after the confidentiality period of the debt agreement expired. Bulgaria was the first country to receive its Iraqi debt via a one-time transfer and not via the payments of bonds over a 23-year period as other countries, Oresharski said.

Minister Oresharski believed the agreement reached by the Bulgarian government with Iraq was the best because possible it was much less risky than a long term payments acquittal. He added that what Bulgaria would receive was a larger amount of money in terms of a GDP percentage than any Iraqi creditor would get.

Most experts approved of the Ministry of Finance decision to choose the cash payment of the Iraqi debt.

Bulgarian government has not yet specified how the money Baghdad would pay, would be used. The options were still being discussed.

The Baghdad-Sofia agreement was reached after 2 years of negotiation during which Sofia's aim was to settle for a maximum of 20 per cent of Iraqi debt. During negotiations Bulgaria had to take into consideration the opinion of the Paris club of creditor countries which called for a remittal of the remaining 80 per cent. Two years ago Romania remitted 80 per cent of its Iraqi debt, Reuters said.

Iraq's debt to Bulgaria was created in the 80s mainly through arms supplies from Bulgaria to Saddam Hussain's government during the Iraq-Iran war. Paying the debt came to a halt in 1992 when the united Nations imposed sanctions on the Baghdad regime for the invasion of Kuwait by Iraqi forces, Dnevnik daily said.