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By Associated Press

Cuba and foreign creditors have reached a landmark agreement Monday over billions of dollars in unpaid debt dating back 25 years.

The Paris Club of creditor nations will cancel $8.5 billion in overdue interest payments, in exchange for a promise by Cuba to pay off $2.6 billion of the original debt over the next 18 years.

"This accord opens the way to a new era in relations between Cuba and the international financial community," Finance Minister Michel Sapin said in a statement. France, Cuba's biggest creditor, led the negotiations. France canceled $4 billion in late interest payments, which made up the bulk of the money Cuba owed.

President Raul Castro has been working to improve relations with creditors in an attempt to modernize and open up the communist island's economy. Cuba defaulted on its debts in 1986 and was devastated by the 1991 collapse of the Soviet Union.

The U.S. is not among the creditor nations since it maintains an economic embargo against Cuba, though President Barack Obama and Castro have opened ties.

The creditors from the Paris Club said in a statement that they "welcomed progress made by Cuba toward the normalization of its relations with creditors and the international financial community."

The group of Cuban creditors includes: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Italy, Japan, the Netherlands, Spain, Sweden, Switzerland and Britain.

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