G20 Finances: a plan to reduce the debt of poor countries is in preparation

Zambia, for example, is no longer in a position to pay the maturities of its eurobonds, that is to say its debt contracted on the financial markets.

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G20 finance ministers have adopted a new framework that should help alleviate, or even cancel, part of the debt of the world's poorest countries.

One week before the next G20 summit, the finance ministers have decided to go further than the current moratorium on the debts of poor countries, a moratorium extended until June 2021, but which is not enough, while some countries of the South are already strangled by debt.

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It is a small revolution but nevertheless described as historic by the Japanese Minister of Finance.

For the first time, all public creditors in poor countries have agreed on new common rules.

Until now, China, the main banker in the Third World, but also Saudi Arabia and Turkey, refused the rules

of the Paris Club

.

This made it impossible to envisage a reduction or even cancellation

of the debts of poor countries

.

From now on, everyone agrees to participate in a new common framework.

This means that an indebted country that wishes to lighten its burden will tomorrow find itself facing all its creditors who will have to participate in the effort, under the aegis of the IMF.

In addition, another major advance: an indebted country will be able to demand from its private creditors the same treatment as that granted by its public creditors.

This new framework will be officially presented at the G20 summit in a week's time and it will undoubtedly help save some over-indebted states from bankruptcy.

Zambia, for example, is no longer in a position to pay the maturities of its eurobonds, that is to say its debt contracted on the financial markets.

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To read: Zambia: default of payment threatens the country

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