Addis Ababa — The Minister of State at the Federal Foreign Office of Germany, Kerstin Müller, and the Ethiopian State Minister of Finance and Economic Development, Dr Mulu Ketsela, have signed a debt cancellation agreement for a total of around 67 million euro on Monday.

The ceremony took place in the presence of President Girma Woldegiorgis and German President Horst Köhler. "By granting this debt cancellation the Federal Government is supporting Ethiopia's economic reform process. We expect that the funds released by the agreement will be used to fight poverty," Müller on the occasion stated.

Combating poverty is a key element of the development goals of the United Nations, which we are committed to achieving. If economic growth continues at its current rate, Ethiopia has good prospects of reaching the goals by 2015." Müller also welcomed Ethiopia's increased investment in education, agriculture and infrastructure, which is laying the foundations for sustainable development and the reduction of poverty in the country. "We will continue to support Ethiopia as our traditionally close and amicable relations enter a second century."

Ethiopia succeeded in fulfilling the eligibility criteria for the Cologne Debt Initiative (HIPC) in April 2004.

The basis of the agreement is the 13 October 2004 arrangement by all affected Paris Club creditors to grant Ethiopia debt relief on 90 percent of state-guaranteed debt from export transactions.

The German Government is willing to waive 100 percent of the country's debts, as Federal Chancellor Gerhard Schröder announced at the EU-Africa Summit in Cairo in April 2000 and confirmed during his visit to Ethiopia in January 2004.

After cancelling financial cooperation liabilities of approximately 54 million euro in 1990, the Federal Government has now forgiven Ethiopia a total of around 197 million euro in commercial debts since 1993.

Prime Minister Meles Zenawi, who held a press conference together with President Kohler told journalists that Ethiopia and Germany are developing very close ties in various sectors. "Further discussions will be held to further strengthen ties between the two countries. This will include vocational training, which is a particular interest of the Prime Minister," President Muller added.

The President, who is on a five day visit in Ethiopia, is expected to visit various development projects, being undertaken by the GTZ, Menschen fur Menschen in Ethiopia, including projects in Harar.