The International Chamber of Commerce and others say the coronavirus is dealing a worse than expected blow to the global economy.
The International Chamber of Commerce (ICC), a global trade union and civil society groups have urged the Group of 20 major economies to extend and expand the freeze on debt service payments to help not only the poorest countries , but also middle-income countries, to overcome the crisis. coronavirus pandemic and its economic fallout.
The ICC, the International Trade Union Confederation, and Global Citizen, a group working to end extreme poverty by 2030, have also called on the finance ministers of the G20, who will meet online on July 18, to take additional measures to strengthen the participation of private creditors, who are slow to commit.
In an open letter to be published on Monday, the groups said further action was needed as the global economy faced an even deeper slowdown than expected in April, when the G20 and Paris Club of creditors announced a freezing of debt service payments for the world. 73 poorest countries until the end of the year.
Last week, top global finance officials said debt restructuring may be needed on a country-by-country basis to help heavily indebted countries hit hard by the outbreak.
So far, 41 countries have requested debt service relief under the G20’s Debt Service Suspension Initiative (DSSI), and the Paris Club has signed agreements with 20 countries ranging from Ivory Coast to Ethiopia and Pakistan.
But many countries not eligible for the moratorium are also at risk of debt distress given the shocks caused by the novel coronavirus outbreak, the group said.
They urged major economies to increase their contributions to enable the International Monetary Fund to continue providing debt service relief to its poorest members until April 2022, and to create similar instruments in regional banks of multilateral development.
They also backed a demand from debtor countries, which called for the creation of voluntary central credit facilities that would serve as senior debt instruments. These facilities would recover all interest and principal payments, with equal treatment of creditors in the form of proportional interest in the facility.