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The Council of Ministers of Spain approved a new restructuring of Cuba's debt with the Iberian country for 193,425,824.70 euros, along with 141 million Canadian dollars and 811 thousand US dollars, through the 2025 bilateral addendum to the debt treatment agreement signed on May 4, 2016.
According to Spanish media, the operation covers liabilities related to FIEM credits (Fund for the Internationalization of Spanish Companies).
According to the summary of the agreement, the Government, within the Ministry of Economy, Trade, and Business, is implementing a new approach to the debt that Cuba still owes to Spain, as part of the bilateral understanding that has been in place since 2016.
The decision was made during a session that included other allocations: 2.4 million euros in grants for the search and identification of victims of the War and the Dictatorship, and an additional 350,000 euros to international organizations and funds.
The consulted document frames the measure within the executive decisions that the Government adopts weekly in the Council of Ministers, impacting various areas of public spending.
Debt forgiveness
In July, the Spanish government activated a Debt Conversion Program with Cuba of up to 375 million euros: the owed payments would be transformed into investment projects on the island (energy, water, food security), supervised by both governments and with the participation of Spanish companies under criteria of transparency and accountability.
This framework was established within the 2016 agreement and a multilateral initiative promoted by the Paris Club.
Until 2020, the external debt of Cuba to Spain amounted to 1,970.66 million euros, nearly two-thirds of the total owed by Ibero-America to Spain (3,086.68 million euros).
The new restructuring adds to that history and maintains the current bilateral framework.
Beyond the rhetoric of "restructuring," the measure "seems to conceal a forgiveness" in favor of Cuba.
These measures come at a delicate time for the Sánchez government, heavily scrutinized due to corruption scandals that have shaken the top echelons of the Spanish Socialist Workers' Party (PSOE).
The most serious case involves Santos Cerdán, former Secretary of Organization of the PSOE and considered the right-hand man of the president, who has been remanded in custody without bail accused of leading a network of illegal commissions along with other high-ranking officials and advisors of the party.
Frequently Asked Questions about Cuba's Debt Restructuring with Spain
What does the new debt restructuring of Cuba with Spain consist of?
The restructuring of Cuba's debt with Spain includes converting debt payments into investment projects on the island. The agreement involves the transformation of 193 million euros in FIEM credits, alongside funds in Canadian and US dollars, into initiatives supervised by both governments. This measure is part of the bilateral agreement signed in 2016 and aims to promote international cooperation based on transparency and accountability standards.
Which sectors will benefit from the debt conversion program between Cuba and Spain?
The debt conversion program is designed to finance projects in strategic sectors such as energy, water, and food security. These projects aim not only to strengthen infrastructure and sustainable development in Cuba but also to involve Spanish companies in their implementation, thus ensuring a positive and sustainable social impact.
What is the political context in Spain surrounding this debt restructuring?
The restructuring of Cuba's debt with Spain occurs amidst a corruption crisis in Pedro Sánchez's government. This context has sparked criticism regarding the restructuring, as some sectors view it as a strategy to divert attention from the internal problems of the Spanish Socialist Workers' Party (PSOE), especially following the corruption scandals involving high-ranking officials of the party.
How much does Cuba owe Spain and how does it compare to other international debts?
Until 2020, Cuba's external debt to Spain amounted to 1.970,66 million euros, representing two-thirds of the total owed by Ibero-America to Spain. On an international level, Cuba has experienced payment issues with several countries, including significant debts to Russia and China. Recent leaks regarding GAESA's reserves have raised doubts about the transparency of the Cuban regime regarding its payment capacity.
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