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Debt of poor countries: creditors agree

2020-10-15T19:16:05.226Z


The text provides for fair treatment, which means that the same parameters, in particular on the amount and duration of the relief, will apply to all creditors.


The Managing Director of the IMF, Kristalina Georgieva, welcomed on Thursday the extension of the moratorium, decided the day before by the G20 countries, on debt repayments of developing countries.

The relief, decided in April to help the states most weakened by the pandemic, now runs until June 2021 and could be extended for another six months.

To date, 46 of the 73 poorest countries eligible for this scheme have requested to benefit from it.

During this finance G20, another important step was taken with the adoption of a common framework for future debt restructuring.

Which will affect all creditors, including China.

In theory, Beijing will no longer be able to negotiate bilaterally with debtor countries.

The text provides for fair treatment, which means that the same parameters, in particular on the amount and duration of the relief, will apply to all creditors.

This common framework aligns with the restructuring practices of the Paris Club.

Thus, private creditors will be subject to the same conditions.

We must move towards more transparency on the debt and better coordination between creditors

Kristalina Georgieva, Managing Director of the IMF

It is a victory for the Paris Club, which for more than 15 years sought to impose its conditions on China.

It is also a guarantee of greater transparency because restructuring is carried out with the approval of the IMF, which conducts audits in countries to accurately assess the financial situation.

This is how hidden debts are discovered, as was the case in Congo-Brazzaville.

One downside, however, before being formally signed at an extraordinary G20 summit in November, the framework must be validated internally by each state.

Which should take two weeks in China.

"

We must move forward towards more transparency on debt and better coordination between creditors,

" said Kristalina Georgieva, saying she was "

encouraged

" by the discussions within the G20, under the Saudi presidency.

Source: lefigaro

All news articles on 2020-10-15

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