# Sovereign debtors, creditors agree on steps to jumpstart debt restructurings Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-04-13 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Global Creditors and Debtors Agree on Debt Restructuring Steps Meta Description: Global creditors, debtor nations, and financial institutions have agreed on new steps to kickstart debt restructurings and streamline processes, with a focus URL: https://financedigest.com/sovereign-debtors-creditors-agree-on-steps-to-jumpstart-debt-restructuringshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-04-13t002346z1lynxmpej3c00irtroptp4imf-worldbank-1736814162905-compressed.jpg) # Sovereign debtors, creditors agree on steps to jumpstart debt restructurings By Andrea Shalal WASHINGTON (Reuters) – Global creditors, debtor nations and international financial institutions on Wednesday agreed ways to jumpstart and streamline long-stalled debt restructuring efforts, including through improved data sharing and clearer timetables. The World Bank, International Monetary Fund and India, current president of the Group of 20 (G20) major economies, issued a joint statement after the first full-fledged meeting of the new Global Sovereign Debt Roundtable, held during the spring meetings of the IMF and World Bank in Washington. The statement, however, did not include mentions of any commitments by China, the world’s largest bilateral creditor, to speed the restructuring process. Reuters reported Beijing was poised to drop its demand that multilateral development [banks share in debt](https://www.financedigest.com/seven-out-of-ten-uk-adults-aged-25-44-never-seek-advice-on-dealing-with-debts-despite-depending-on-the-bank-of-mum-and-dad.html "Seven out of ten UK adults aged 25-44 never seek advice on dealing with debts despite depending on the bank of mum and dad") restructuring losses, partly in exchange for the IMF and World Bank providing earlier access to their debt sustainability analyses for countries receiving debt treatments. But the statement only included the institutions’ part of that bargain, to share more information more quickly and for multilateral development banks (MDBs) to quantify “net [positive flows” of concessional financing in restructuring cases](https://www.financedigest.com/italy-probes-meta-over-abuse-of-position-in-music-rights-case.html "Italy probes Meta over abuse of position in music rights case"). IMF strategy chief Ceyla Pazarbasioglu said China and other participants had acknowledged that there are different ways of contributing to a restructuring, and “the best way for MDBs to contribute … is to [provide fresh financing](https://www.financedigest.com/ultimate-finance-provides-good-funding-offer-to-sig-customers.html "Ultimate Finance provides good funding offer to SIG customers") to countries, as much as possible in grant terms. That was the key deliverable, and I think this consensus around the table will also allow and [facilitate quicker agreement in terms of the individual debt](https://www.financedigest.com/exclusive-naftogaz-ceo-prepared-to-step-down-if-it-would-facilitate-debt-deal.html "Exclusive-Naftogaz CEO prepared to step down if it would facilitate debt deal") cases,” she said in a video interview taped by the IMF. The statement said participants [“focused on the actions that can be taken now to accelerate debt](https://www.financedigest.com/dollar-gains-against-yen-as-fed-policy-debt-ceiling-in-focus.html "Dollar gains against yen as Fed policy, debt ceiling in focus") restructuring processes and make them more efficient, including under the G20 Common Framework. The meeting came amid ongoing delays in finalizing debt treatment agreements for Zambia, Ghana and Ethiopia under the G20 Common Framework, although Pazarbasioglu on Wednesday said she hoped for “good news” on Zambia’s case [next week](https://www.financedigest.com/china-arrivals-in-uk-next-week-will-not-face-compulsory-covid-tests-independent.html "China arrivals in UK next week will not face compulsory COVID tests -Independent"). U.S. officials and others blame the delays largely on foot-dragging by China, now the world’s largest bilateral creditor, and reluctance by private-sector creditors to join in. Ghana, Zambia and Ethiopia are at various stages of the process, but [debt experts say China’s](https://www.financedigest.com/analysis-no-china-no-deal-bid-to-break-sovereign-debt-logjams-gets-weary-thumbs-up.html "Analysis-No China, no deal: Bid to break sovereign debt logjams gets weary thumbs up") recent agreement to provide specific financing assurances for Sri Lanka, a middle income country that was not eligible under the G20 framework, could be a positive sign for the other cases. Zambia’s Treasury Secretary Felix Nkulukusa told a panel hosted by the [Open Society Foundations that Chinese](https://www.financedigest.com/lack-of-electric-vans-opens-door-for-chinese-other-ev-makers.html "Lack of electric vans opens door for Chinese, other EV makers") officials had told Zambia they would not insist that MDBs accept debt reductions, but wanted them to participate on a “fair basis. He said most of the outstanding [issues with China had been resolved in Zambia’s specific case, making him hopeful a solution could be reached soon, but the roundtable should help resolve broader issues on debt](https://www.financedigest.com/necessary-lessons-in-debt-six-out-of-ten-brits-wouldnt-feel-comfortable-discussing-any-money-issues-with-their-children.html "Necessary lessons in debt? Six out of ten Brits wouldn’t feel comfortable discussing any money issues with their children") relief facing other countries. The statement said participants agreed on the need to urgently [improve data-sharing on macroeconomic projections and debt](https://www.financedigest.com/european-junk-debt-sales-spring-back-to-life-as-sentiment-improves.html "European junk debt sales spring back to life as sentiment improves") sustainability assessments in debt relief cases, resolving a frustration frequently voiced by China about not being looped in early enough in the process. It said the IMF and [World Bank](https://www.financedigest.com/post-crash-banking-regulation-is-transforming-the-world-of-corporate-lending-for-the-better.html "Post-crash banking regulation is transforming the world of corporate lending – for the better") would rapidly issue staff guidance to ensure more timely data-sharing. Participants also discussed the role of multilateral development banks (MDBs) in debt restructuring processes through their provision of “net positive flows” of concessional finance, and welcomed the implicit debt [relief provided](https://www.financedigest.com/recovery-bus-provides-cool-relief-for-s-koreas-covid-19-testers.html "‘Recovery bus’ provides cool relief for S.Korea’s COVID-19 testers") by the World Bank’s International Development Association arm through low interest or zero-interest loans and grants, the statement said. They agreed meet to again in coming weeks on the comparability of treatment of creditors, and would work on principles for cut-off dates, suspending debt [payments at the beginning of the process](https://www.financedigest.com/are-your-payment-processes-in-cheque-for-the-new-legislation.html "ARE YOUR PAYMENT PROCESSES IN CHEQUE FOR THE NEW LEGISLATION?"), how to treat arrears, and the perimeter of restructured debt, including domestic debt. “This work will also help in clarifying potential timetables to accelerate debt restructurings,” the statement said. Separately, Japanese [Finance Minister](https://www.financedigest.com/scottish-finance-minister-kate-forbes-to-run-for-countrys-leadership.html "Scottish finance minister Kate Forbes to run for country’s leadership") Shunichi Suzuki said Japan, France and India will announce a new platform for creditors to coordinate restructuring of Sri Lanka’s debt, adding it would be “very nice” if China were to join the effort. (Reporting by Andrea Shalal; additional reporting by David Lawder and Leika Kihara; Editing by Dan Burns,d Chris Reese and Simon Cameron-Moore) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---