EU contributes €183 million to debt relief for 29 of the world's poorest and most vulnerable countries
The EU will contribute €183 million to the IMF's Catastrophe Containment and Relief Trust for debt relief in 29 low-income countries, allowing them to increase their social, health and economic spending in response to the COVID-19 crisis. This contribution, announced just after the G20 Summit endorsed a Common Framework on Debt Treatments beyond Debt Service Suspension Initiative (DSSI), is fully in line with Commission President von der Leyen's proposal for a Global Recovery Initiative that links investments and debt relief to the Sustainable Development Goals.
Josep Borrell, High Representative and Vice President for Foreign and Security Policy, yesterday said:
”The EU is combining injections of funds for the rapid easing of budget constraints to help the immediate response – through contributions like this one – with a sustained longer-term plan to assist partners in weathering a severe social-economic storm, which is far from over. The EU has been leading global efforts to do more on debt relief and debt restructuring efforts. It is our hope that our contribution will pave the way for others to join those global efforts.”
Paolo Gentiloni, Commissioner for Economy, added:
“Today, Europe makes an important contribution to multilateralism and debt relief. The EU as a member of the G20 strongly supports the Debt Service Suspension Initiative and the new Common Framework on Debt Treatment. This contribution to the IMF debt relief trust is a further demonstration of our firm commitment to helping low-income countries deal with their debt burden.”
Jutta Urpilainen, Commissioner for International Partnerships, yesterday stressed:
“The Commission is determined to continue supporting its partner countries in maintaining their path toward the SDGs despite dire financial situations. Debt levels were already high before the crisis and in many countries they are now simply becoming unsustainable. This is why we have decided to contribute €183 million for debt relief through this IMF mechanism.”
Kristalina Georgieva, IMF Managing Director, participated in the virtual European Foreign Affairs Council of Development ministers to maximise common awareness of the worsening debt situation in many countries, yesterday said:
“I am very thankful to the EU for the generous contribution of €183 million to the CCRT—a critical step to help the world's most vulnerable countries provide health care and economic support for their people during the ongoing pandemic. The EU and the IMF have a strong partnership on development financing. I urge others to join the EU and our other contributors in giving to the CCRT. Contributions from our member countries are instrumental in helping the Fund support the most vulnerable countries.”
The EU is leading the way on international partnerships
The EU funds channelled through the IMF's Catastrophe Containment and Relief Trust (CCRT) will provide debt service relief to 29 of the world's poorest and most vulnerable countries.
The CCRT pays debts owed to the IMF for eligible low-income member countries that are hit by the most catastrophic natural disasters or battling public health disasters—such as epidemics or global pandemics. This allows them to free up resources to meet exceptional balance of payments needs created by the disaster rather than having to assign those resources to debt service.
Experience from the first two six-month tranches of CCRT relief showed that benefitting countries were able to boost their projected 2020 priority spending by some 1.2 percentage points of GDP; with expenditure on health and social protection increasing, on average, by about a 0.5 percentage point.
Another positive benefit from this short-term liquidity support is that it will also contribute to the countries' macro-economic stability.
With this €183 million contribution, the EU becomes the largest donor to the CCRT, which so far has received over $500 million in grants from donor countries.
Latest News from
EIB and European Investment Advisory Hub support Thüringer Aufbaubank in delivering targeted advisory support to municipalities15/01/2021 13:25:00
The European Investment Bank (EIB) and the Thuringian Development Bank, Thüringer Aufbaubank (TAB), yesterday signed a grant agreement funded by the European Investment Advisory Hub.
EU files WTO panel request against illegal export restrictions by Indonesia on raw materials for stainless steel15/01/2021 12:38:00
The EU yesterday requested the establishment of a panel at the World Trade Organization (WTO) to seek the elimination of unlawful export restrictions imposed by Indonesia on raw materials necessary for the production of stainless steel, notably nickel ore and iron ore.
New US president: how EU-US relations could improve15/01/2021 11:33:00
A new US president taking office represents an opportunity to reset transatlantic relations. Find out what the EU is offering to work together on.
New EU-UK agreement is welcome but thorough scrutiny remains, insist lead MEPs15/01/2021 10:25:00
Foreign Affairs and Trade MEPs welcome the new EU-UK agreement as a good deal but demand proper parliamentary scrutiny powers and thorough access to information.
Covid-19: how the EU can help small businesses15/01/2021 09:10:00
Small companies have been hit hard by the Covid-19 crisis. MEPs believe the EU can help by easing requirements and supporting their resilience.
Statement of President von der Leyen on the 30th anniversary of Freedom Defenders Day in Lithuania14/01/2021 15:25:00
Statement of President von der Leyen on the 30th anniversary of Freedom Defenders Day in Lithuania (13 January 2020).
Banque des Territoires and EIB launch the Clean Buses Platform, an innovative investment programme dedicated to greening bus fleets across France14/01/2021 13:25:00
The European Investment Bank (EIB) and Banque des Territoires will each invest €100 million in an investment platform to finance the energy transition of bus fleets across France.
European Investment Fund announces €300 million of space sector finance with new investments into Orbital Ventures and Primo Space14/01/2021 11:33:00
The European Investment Fund (EIF) is partnering with the European Commission, to announce €300 million of investments into the EU space sector, supporting ground-breaking innovation in the industry.
Mergers: Commission clears acquisition of Refinitiv by London Stock Exchange Group, subject to conditions14/01/2021 10:38:00
The European Commission has approved, under the EU Merger Regulation, the acquisition of Refinitiv by the London Stock Exchange Group (‘LSEG').