- Title: Creditor countries urged to think about post-2020 debt relief
- Date: 8th July 2020
- Summary: WASHINGTON, D.C., UNITED STATES (FILE) (REUTERS) VARIOUS EXTERIORS OF WORLD BANK
- Embargoed: 22nd July 2020 15:19
- Keywords: France G20 Georgieva IMF Le Maire Malpass World Bank coronavirus crisis debt freeze economic impact
- Location: BERLIN, GERMANY / RIYADH, SAUDI ARABIA / PARIS, FRANCE / WASHINGTON, D.C., UNITED STATES
- City: BERLIN, GERMANY / RIYADH, SAUDI ARABIA / PARIS, FRANCE / WASHINGTON, D.C., UNITED STATES
- Country: France
- Topics: Economic Events
- Reuters ID: LVA005CLYA347
- Aspect Ratio: 16:9
- Story Text: G20 countries and Paris Club creditor nations must start thinking about debt relief for the poorest countries beyond a debt payment suspension deal this year, finance chiefs said on Wednesday (July 8).
Speaking to an online G20 conference, IMF Managing Director Kristalina Georgieva said debt restructuring may be needed on a country-by-country basis for those "that simply cannot stay above water without determined action".
The Group of 20 leading economies and the Paris Club, an informal group of state creditors coordinated by the French finance ministry, agreed in April to freeze debt payments from the 73 poorest countries for the rest of 2020.
"We need to start thinking about what comes next, we will have to take decisions at the end of 2020," French Finance Minister Bruno Le Maire told the conference focusing on debt in emerging markets and developing economies.
"We could decide to extend the initiative by a few months or we could decide to already start a new phase that could involve deeper debt restructuring for some countries on a case by case basis and in a multilateral framework."
So far 41 countries have applied for relief from debt servicing under the payment suspension deal, and the Paris Club has signed agreements with 20 countries ranging from Ivory Coast to Ethiopia and Pakistan.
The Debt Service Suspension Initiative (DSSI), as it is officially known, will free up $12 billion that countries can use to deal with the health and economic strains caused by the coronavirus, according to World Bank data.
World Bank President David Malpass told the conference that freezing debt payments would not be enough for some heavily indebted countries that need permanent debt service reductions.
The initiative is also unique in bringing China to the table as it has become a major creditor in recent years and come under frequent criticism for a lack of transparency on its lending.
(Production: Ardee Napolitano)
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