In 1996 Russian negotiators closed a historic deal with Western official lenders–governments and government agencies–under which Russia assumed responsibility for $39 billion in Soviet-era debt and took title to Soviet assets abroad. The Russian government made only a few payments on this debt before declaring a moratorium in August 1998. The unpaid bills stacked up, and the creditors, informally organized as the Paris Club, agreed in 1999 to capitalize the unpaid interest and roll the payments forward into late 2000. Now the bills are overdue again, and Russia still refuses to pay. The 2001 budget, which President Putin signed into law last December, anticipates paying the foreign debt out of new money coming in from the International Monetary Fund and the World Bank. But Russia’s Central Bank has yet to agree with the Fund on the conditions for a new lending program. No dollars in, no dollars out, says Finance Minister Aleksei Kudrin. Unacceptable, replies French Finance Minister Jean-Pierre Jouyet, no doubt looking at Russia’s record current-account surplus, which may have reached $50 billion in 2000. Germany, which holds 40 percent of the debt, threatens to cut off trade credits unless interest payments resume…. The United States is mostly off the hook on this one, holding less than $3 billion of the debt, including unpaid interest. Half of that was incurred under the lend-lease program during World War II.