Germany and France have agreed to a US request to write off a large part of Iraq's huge $US120 billion debt ($A162 billion).
President Jacques Chirac, of France, and Chancellor Gerhard Schroeder, of Germany, reached a deal in separate talks with President George Bush's new envoy in Iraq, James Baker. The decisions were taken in spite of anger felt in both countries over Mr Bush freezing out French and German companies from the $US18 billion in construction contracts in Iraq, apparently as punishment for opposing the war.