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Russia absorbs 90 percent of Cuba's debt to the USSR

Cuban President Fidel Castro and Russian President Vladimir Putin speak December 14, 2000 at the 'Palace of the Revolution' in Havana, Cuba.
Photo by Getty Images/Getty Images

Russian president Vladimir Putin strengthened his nation’s ties with Cuba by absorbing 90 percent of its estimated $35 billion debt to the former U.S.S.R. The Russian Federation Council approved the deal on Wednesday, relieving the communist Caribbean island of an American trade embargo which has lasted over 50 years.

Beginning in October, Cuba will make the first of its semi-annual payments to the Russian government. If all goes according to plan, the remaining $3.5 billion will be paid in full in 10 years time. Putin threw Cuba another bone as Russia outlined a deal that would fund joint projects between the two allies, likely strengthening the offshore oil exploration and drilling project which began last year.

The alliance between the Soviets and Cuba dates back to 1959 when Fidel Castro rose to power. The Kremlin helped arm the only communist nation in the region, helping them thwart the Bay of Pigs invasion and nearly wiping out the world as we know it during the Cuban Missile Crisis. When the U.S.S.R. dissolved in 1991, relations between Russia and Cuba became less and less prevalent; but they seem to be picking back up in the recent past.

It remains to be seen how the United States will react with a less-indebted Cuba in the picture, and so close by, at that. Perhaps the current administration will threaten Russia with more sanctions, or maybe this deal affects nothing. Cuba has been officially McDonalds and Coca-Cola free since the U.S. placed sanctions against the island nation in 1961, with little-to-no interaction between the two countries since. Although Americans have not been able to enjoy Cuba’s fine cigars or rum, the embargo hasn’t had as great of an economic impact in the States as it has in Cuba. President Obama and Cuban officials have been unofficially trying to mend ties by playing the telephone game via Uruguayan President Jose Mujica, though it’s far from a promising breakthrough.

Putin commences a Latin America tour on Friday with his first stop being Havana. He will meet with Cuban President Castro as well as the ailing former leader, Fidel Castro. If the $31.5 billion bailout weren’t a telltale sign of mending ties between the two nations, a visit to the Castro brothers only helps foreign relations further. Putin will also be visiting with Argentina’s president, Cristina Fernandez, after the World Cup final in Rio de Janeiro on Sunday. Russia is the host for the 2018 World Cup tournament; therefore it is ceremonial for the current host to metaphorically “pass the torch” to competition’s next host.

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