International Monetary Fund Managing Director Kristalina Georgieva warned on Friday that the global economic crisis has not gone away, saying the world's poorest countries would need further assistance, including debt relief and new financing
WASHINGTON (Pakistan Point News / Sputnik - 13th November, 2020) International Monetary Fund Managing Director Kristalina Georgieva warned on Friday that the global economic crisis has not gone away, saying the world's poorest countries would need further assistance, including debt relief and new financing.
Georgieva made the remarks after an extraordinary meeting of the G20, during which the group of nations agreed to a "common framework" to extend its temporary debt freeze until June 20, 2021 and negotiate new debt-repayment arrangements with the world's poorest countries.
"Let's be very frank here. We are not out of the woods. This crisis is not over. We need further support through debt relief and through fresh financing," Georgieva said after the deal was announced.
Georgieva said the deal to extend the G20's Debt Service Suspension Initiative (DSSI) would give some countries the "breathing space" needed to weather the crisis, but warned that other nations are currently saddled with unsustainable levels of debt.
"And this suspension time ought to be used to bring them to a sustainable level," she said. "This is where the timely Common Framework comes into play-a coordinated approach to debt treatment, a standardized approach, but with case-by-case resolution."
The G20 convened to put together the terms of debt restructuring for low-income countries struggling with the regular schedule due to coronavirus-related disruptions. Under the new framework, the restructuring process will be initiated at the request of a debtor country. The eligible debt includes all public and publicly guaranteed debts which have an original maturity of more than one year. The repayment period will be six years, of which one year counts for a grace period.
The G20 said the new framework had been endorsed by the Paris Club, an unofficial group comprising the largest creditor countries.
