SYRIA - Oct. 30 - Schroeder Visit; Debt Rescheduling.

German Chancellor Gerhard Schroeder arrives in Damascus on an official 2-day visit as part of a Middle East tour. Later he met with Pres. Bashar Al Asad and PM Mohammed Moustapha Miro. He will leave for Israel. Talks centred on an accord to reschedule debt to Germany, estimated at about 1.25 bn euros ($1 bn), under a preliminary deal for a new 20-year repayment schedule, starting with an interest-free five-year grace period. The outlines were settled during negotiations at the start of October in Damascus between officials and Germany's Deputy Finance Minister Caio Koch-Weser. Most of the debt was contracted by the former East Germany for economic and especially industrial imports. Syria halted those payments after Germany's reunification 10 years ago. Berlin recognised part of Damascus claim that it had not taken delivery of part of the materials ordered from the former East Germany. Syrian exports to Germany totalled $760m in 1999, while Syrian imports of German products hit $280m, according to figures from the German Embassy. Germany is the second largest exporter to Syria following Italy, mostly of machines, industrial materials, chemical products, cars and stainless steel. Petroleum products form most of Syria's exports to Germany, which also buys the country's cotton, textiles and agricultural goods. The largest German investor in Syria is petroleum company Veba, part of a consortium run by Shell which has invested $5 bn.