Ecuador's Economy Minister Ricardo Patino said on Monday that his country has set up a commission to audit Ecuador's 10.3 billion-U.S.-dollar external debt, and that Ecuador will not pay debt the commission declares "illegitimate."

The commission, which will report to the government on Tuesday, has analyzed all the debt issued by the nation from 1970 until June 2006. It said that Ecuador has paid creditors 127.3 billion dollars, or 156 percent of the money the country borrowed over that time.

The special commission investigating foreign debt said that debt acts as a brake on economic development. As much as a third of the money disbursed is not being used, and high interest rates are being paid for it.

The government has to pay 135 million U.S. dollars in interest on Thursday of next week, an obligation which has a 30-day grace period.

Patino said that he plans to reduce Ecuador's debt service to 28 percent from 38 percent of current budget spending, and to spend more on social welfare.

Source: Xinhua