Cuba wants to pay off $270 million debt in rum

Cuba's debt dates back to when both Cuba and then Czechoslovakia were firmly within the Soviet geopolitical orbit

Cuba has proposed a novel way of spiriting away its enormous global debts - paying them off in bottles of rum.

Cuba has offered to repay the Czech Republic for its Cold War debts with one of its specialties: several brands of rum. Last year, a group of 14 nations, mostly wealthy European countries, jointly made a decision to give Cuba "extraordinary debt relief", forgiving some US$8.5 billion in debt while restructuring the repayment of some remaining US$2.6 billion over the next 18 years.

Cash-strapped Cuba has offered to pay off some of its old debt in rum. According to the AP, the Czechs import around US$2 million of Cuban rum every year.

Cuba's external debt is around US$25 billion, equivalent to about 31 percent of its GDP.

Although, the European Union bars most pharmaceuticals from being used as payment. In the 1970s and 1980s, Cuba took out development loans from private non-U.S. banks and then defaulted in 1986. The country owes $276m (£222m) to the Czech Republic.

The Paris Club, an informal group of rich creditor countries, said previous year that Cuba owed its members more than $11 billion.

Cuba's debt goes back to when the country was part of Czechoslovakia and the wider communist bloc within Eastern and Central Europe.

Several members of the club, including the U.K., Australia, Canada and France, agreed a year ago to restructure portions of their Cuban debt and wave some payments.