"We do not feel like paying our old debts, but we need to borrow some more money. Please can we restructure?" Put as baldly as this, Russia's approach to the western countries that lent to the Soviet Union sounds less than persuasive. But it has worked in the past and will probably do so again. In February, the London Club of commercial banks agreed to write down more than a third of Russia's Soviet-era debt to them, swapping the rest for long-dated, low-interest bonds. Now Russia wants to pull off a similar trick with the Paris Club, a grouping of 19 rich countries that handles state-to-state debts—in Russia's case $42 billion. This would clear the way for a return to the international capital markets. That seemed almost inconceivable after Russia's default of August 1998, when bankers stormed out of Moscow; some of the same pinstriped furies are now drooling at the prospect of lead-managing Russia's forthcoming Eurobond.
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