The EU is committed to furthering international debt relief efforts for African countries.
The Council today approved a set of conclusions in response to a call from the European Council of 15-16 October 2020 to prepare a common approach in this respect.
The conclusions highlight the increasing debt vulnerability in low income countries, particularly in Africa, and underscore the EU’s support for a coordinated international approach on debt relief efforts for African countries.
The Council welcomes the G20 – Paris Club Debt Service Suspension Initiative (DSSI), which offers a temporary debt moratorium to the poorest countries to help them manage the severe impact of the COVID-19 pandemic, and its extension until 30 June 2021 with the possibility of a further extension by 6 months. It commits to a full and transparent implementation of this initiative.
The Council also recognises that for countries with unsustainable debt levels further debt relief may be required. It welcomes the G20 agreement on a “Common Framework for Debt Treatments beyond the DSSI” as a major step forward in the sovereign debt restructuring international architecture. In this context, it advocates the negotiation of debt restructuring where necessary, on a case-by-case basis, while ensuring strong conditionality on public financial management, anti-corruption frameworks and domestic resource mobilization in the context of an IMF programme.
The Council also stresses that debt transparency is critical for a sound assessment of debt sustainability, debtor government accountability, and to enable informed decisions for borrowers and creditors in the context of debt relief efforts. It takes the view that all public debt data should therefore be disclosed and supports international efforts aimed at strengthening debt transparency in low-income countries.