G7 backs debt relief for poor countries if G20, Paris Club join

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Group of Seven (G7) finance officials on Tuesday vowed to continue to act as needed to combat the coronavirus pandemic and stabilize the global economy, and threw their support behind a push to provide temporary debt relief to the poorest countries.

In a joint statement, G7 finance ministers and central bankers said they were ready to provide “a time-bound suspension on debt service payments due on official bilateral claims for all countries eligible for World Bank concessional financing” if joined by China and other countries in the Group of 20 major economies, and as agreed with the Paris Club group of creditors.

Following a video conference, the officials also called for more contributions to the International Monetary Fund's facilities that support the poorest countries, and said the debt relief effort should include private creditors on a voluntary basis, as well as efforts to enhance debt transparency.

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“Ministers and Governors reiterated their pledge to do whatever is necessary to restore economic growth and protect jobs, businesses, and the resilience of the financial system,” they said in the statement, saying they would continue to work closely together in other forums, such as the G20, the IMF, the World Bank and the Financial Stability Board (FSB).

“The scale of this health crisis is generating unprecedented challenges for the global economy,” they said, underscoring the importance of a well-coordinated international response and vowing to use “all available policy tools” to reducing the depth of the crisis.

The officials said they were working to address the global shocks caused by the pandemic, which are hitting emerging markets and developing economies particularly hard.

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They said they supported measures taken by the IMF, the World Bank and regional development banks to provide flexible and rapid financing in response to the crisis, including the IMF’s temporary expansion of access to emergency aid and its proposed introduction of a short-term liquidity line.

The officials also expressed support for the FSB's efforts to mitigate the financial stability risks posed by the pandemic, including through the use of flexibility within existing international regulatory standards.

They said they would continue to consider further near-term actions to stabilize the global economy, and pledged to return to other priority agenda items, such as debt transparency and sustainability, digitalization and illicit financial flows, once the immediate impact of the crisis abated.

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