The Cuban government has acknowledged to its main international creditors that it is grappling with significant challenges in meeting its external debt obligations. They have appealed for "understanding" in light of the severe economic and financial crisis engulfing the island.
According to a report by EFE, a delegation led by Deputy Prime Minister Óscar Pérez-Oliva met with representatives of the Paris Club in France. During the meeting, they outlined Cuba's economic plight and attributed the situation to tightened U.S. sanctions, particularly those intensified during President Donald Trump's second term, describing them as the "main obstacle" to the country's development.
Paris Club creditors, which include nations such as France, Spain, Japan, Canada, the United Kingdom, Switzerland, and other European countries, acknowledged Cuba's "efforts" to fulfill its financial commitments. They emphasized the significance of maintaining the "constructive ties" that have been established.
In January 2025, both parties decided to amend the terms of the agreement originally signed in 2015 and revised in 2021, following the Cuban government's inability to meet its obligations. As per the creditors' statement, the new agreement provided Havana with "more advantageous conditions" to tackle its economic difficulties and sustain financial relations between the parties.
The historic 2015 agreement had forgiven $8.5 billion of a total $11 billion debt, with Cuba agreeing to pay the remainder by 2023. Yet, the island has partially defaulted on payments since 2019, and in 2020, it declared its inability to meet them during the pandemic, requesting a two-year moratorium on $200 million in arrears.
The Paris Club granted only a one-year extension with the possibility of renegotiation, as recalled by EFE. By mid-2021, the parties agreed to further extend the payment deadlines, but the situation has shown no improvement.
Cuba's economy has contracted by 15% over the past five years, plagued by severe liquidity issues and a shortage of foreign currency, while businesses and citizens face increasing restrictions in accessing cash.
Cuba's Debt Challenges and Economic Crisis
What are the main reasons for Cuba's current economic difficulties?
Cuba attributes its economic struggles primarily to U.S. sanctions, especially those reinforced under President Donald Trump's administration, which they claim are the main barrier to the country's development.
How has the Paris Club responded to Cuba's request for debt relief?
The Paris Club has recognized Cuba's efforts to meet its financial obligations and has agreed to offer more favorable conditions to help the country address its economic challenges. However, the extension granted was limited, with only a one-year postponement initially approved.
What was the outcome of the 2015 debt agreement?
The 2015 agreement led to the forgiveness of $8.5 billion out of $11 billion in debt, with Cuba committing to pay the remaining amount by 2023. However, Cuba has struggled to meet these obligations, partially defaulting on payments since 2019.