September 21, 2020

G7 backs debt relief to poorer countries if China joins



The G7, the most industrialized and wealthiest countries in the world, announced on Tuesday its willingness to support a “temporary suspension of debt payments” of the poorest countries, if it has the backing of China, given the serious economic impact of the coronavirus pandemic.

“The ministers and governors stressed that a number of the most vulnerable and poor countries will face acute challenges related to the consequences of COVID-19,” the G7, made up of Germany, Canada, France, Italy, Japan, the United Kingdom, said in a statement. United and United States, which holds the rotating presidency this year.

He also signaled his willingness “to offer a temporary suspension of debt service payments in official bilateral petitions to all countries eligible for World Bank consortium funds, if all official bilateral creditors in the G20 join and as agreed at the Paris Club. ”

Russia and China are in the G20, but not in the G7.

In recent years, the Asian giant has become one of the leading lenders in developing countries.

The G7 also called for “more contributions” to the International Monetary Fund (IMF) instruments to support the poorest countries, and maintained that “debt relief should include private creditors on a voluntary basis” as well as “efforts to guarantee the debt transparency. ”

This Monday, the IMF Executive Board approved immediate debt relief for some of the 25 poorest countries in the world, most in Africa, although Haiti, Afghanistan, Nepal and Yemen are also included.

These countries will receive financial aid from a catastrophe fund that will allow them to meet their debt obligations to the IMF for at least the next six months.

The G20 meets this Wednesday within the framework of the IMF and World Bank assembly, which this time is celebrated virtually by the coronavirus.

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