Club de Paris

Paris Forum organizes its first regional conference in Namibia

The Paris Forum held its first regional conference in Southern Africa on 8 December 2017, in cooperation with the Ministry of Finance of Namibia and CABRI

On 8 December 2017, the Paris Forum co-organized, with the support of the Ministry of Finance of Namibia and the Collaborative Africa Budget Reform Initiative (CABRI), its first regional conference in Southern Africa. This event aimed at fostering further focused discussions among sovereign lenders and borrowers on debt issues.

Representatives of more than 10 countries and of 6 international institutions gathered in Windhoek, in Namibia. The discussions focused on ways to ensure a sustainable financing for development and to improve debt management.

Participants highlighted the importance of transparency to ensure debt sustainability. They raised awareness on the potential impact of contingent liabilities, in particular through public private partnerships and state-owned enterprises, and collateralized debt on the debt sustainability path. They also stressed the necessity of a sound public financial management, capacity building and robust macroeconomic policies.

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Paris Forum regional conference in Namibia

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pr20171208_paris_forum_regional_conference-final.pdf

Event date:

Friday, 8 December, 2017 - 00:00

5th Conference of the Paris Forum 2017

Paris Forum calls for improved transparency on debt data from all stakeholders

Representatives of more than 40 countries and of 8 international financial institutions and international organizations met on 16 November 2017 at the 5th Conference of the Paris Forum.

The Paris Forum mission is prevention of sovereign debt crises, a vision shared by all participants. This year’s conference focused on building financial resilience in countries facing external shocks to achieve sustainable development.

Participants highlighted the rising indebtedness of developing countries and stressed the need for better cooperation among all stakeholders. They also agreed on the importance of greater transparency on debt data between official and private creditors and debtors to improve risk assessment, hence prevention.

Participants discussed the possible tools to mitigate the impact of external shocks on debt sustainability, focusing in particular on state contingent debt instruments. They also stressed the necessity of a sound public financial management and consistent technical assistance.

The 5th annual conference of the Paris Forum gathered the Paris Club’s 22 permanent members, its ad hoc participant (China), G20 members (Argentina, Indonesia, Mexico, Saudi Arabia), members of Gulf countries (Kuwait), members of the European Union (Czech Republic, Poland), and other countries (Antigua and Barbuda, Cameroon, Chad, Comoros, Côte d’Ivoire, Democratic Republic of Congo, Egypt, The Gambia, Jordan, Niger, Senegal, Sri Lanka and Vietnam). International institutions such as the International Monetary Fund, the World Bank, the African Development Bank, the Asian Development Bank, the European Central Bank, the European Commission, the OECD and the UNCTAD also participated in this Conference. Civil society was invited for the second time and was represented by academics and Non-Governmental Organizations.

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Forum de Paris

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The Paris Forum kicks off reflections on operational guidelines for the sustainable financing of development. Picture by A Salesse

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pr20171116_paris_forum.pdf

Event date:

Thursday, 16 November, 2017 - 19:15

Meeting of the Paris Club with representatives of the private sector

OFFICIAL AND PRIVATE CREDITORS DISCUSS THE BUILD-UP OF SOVEREIGN DEBT IN DEVELOPING COUNTRIES AND REAFFIRM THEIR COMMITMENT TO PROMOTE DEBT SUSTAINABILITY

Delegates representing official and private creditors gathered in Paris on 21 June 2017 for the 17^th annual meeting between the Institute of International Finance and the Paris Club to discuss debt trajectories in developing countries, including specific country cases. This Paris Club – IIF annual meeting is a unique event designed to foster dialogue and cooperation among all creditors, and to reflect upon developments taking place in the field of sovereign borrowing.

Faced with increasing financing needs, a substantive number of developing countries display steadily rising levels of public debt, edging towards the levels reached before the massive debt cancellation initiatives of the 1990s and 2000s.

In contrast with previous decades, when bank financing was prevalent, there is now an increasingly dispersed creditor base and bond issuances have gained prominence as a source of financing. Coordination is made more difficult, which increases the risk of inequitable treatment among creditors.

Participants recalled that a debtor and its creditors share responsibilities in maintaining debt on a sustainable path. In a situation of financial stress, orderly processes are of paramount importance. In this context, co-operation, transparency and fair burden sharing by all stakeholders have been and remain cornerstones of the most successful sovereign debt restructuring agreements. When there is uncertainty on debt sustainability, necessary measures should be taken by the debtor country to maintain market confidence; other stakeholders should work in a coordinated and timely manner to provide complementary measures as needed.

Participants agreed that private and official creditors should improve their focus on the elements of debt sustainability, such as those outlined in the G20 operational guidelines for sustainable financing, which present a more durable approach to overall debt sustainability of developing countries than any new large scale debt reduction initiative.

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iif_pr_2017.pdf

Event date:

Wednesday, 21 June, 2017 - 19:30

The Paris Club releases comprehensive data on its claims as of 31 December 2016

Since 2008, the Paris Club has published on an annual basis the amount of its claims on foreign countries.

These claims are held either by the Paris Club member states directly, or through their appropriate institutions (especially export credit or official development aid agencies) on behalf of the member states.

The table contains comprehensive data that cover the full range of claims held on sovereign countries and public entities by Paris Club members, who took part in this global data call. It therefore encompasses very different categories of debtors, roughly half of which have always fully serviced their debt owed to Paris Club full and ad hoc members. Ninety of the debtor countries listed in the table have negotiated an agreement with the Paris Club at some time in the past. Most of the countries listed below are very unlikely to apply for debt relief in the future given their current macroeconomic prospects.

The table published on the Paris Club website shows the total amount of claims as of
31 December 2016 held by Paris Club members on each debtor country, with a split between Official Development Assistance (ODA) claims and non-Official Development Assistance (NODA) claims. The stock of claims is aggregated at each debtor country level.

The total of Paris Club claims, excluding late interest, amounts to USD 301 billion of which USD 151 billion represents ODA claims and USD 150 billion represents NODA claims.

Some amounts on which Paris Club creditors decided to provide debt relief may still appear in this table for technical reasons, especially delays in the signing of bilateral agreements implementing Paris Club agreements.

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2016a.pdf

Event date:

Wednesday, 21 June, 2017 - 18:45

Publication of the 2016 annual report of the Paris Club

The 2016 annual report of the Paris Club is now available on the Paris Club website.

2016 has been a historical year for the Paris Club, in terms of its recognition on the world stage, its expansion to two new members and its contribution to sovereign debt issues.

Paris Club’s 60^th anniversary was celebrated on July 1^st, on which day Korea was welcomed as its 21^st member, marking the culmination of almost 20 years of cooperation. This exceptional day gathered high-level officials to discuss the current and future challenges of sustainable financing and orderly sovereign debt restructuring.

Soon after Korea, Brazil became the 22^nd member of the Paris Club, on November 29^th, during the 4^th Annual Paris Forum Conference. These two accessions demonstrate the Paris Club’s ability to expand its membership to emerging creditors and reinforce its position as the principal international forum for restructuring official bilateral debt.

This Conference also enabled representatives of more than forty sovereign credit and debtor countries and of ten international organizations to exchange views on the definition of such operational guidelines for sustainable financing, during a session open to the press and civil society.

In 2016, the Paris Club and the Institute of International Finance (IIF), worked hand in hand to continue their joint reflection by organizing their 16^th annual meeting. This meeting was a unique opportunity for public and private creditors to share views on the macroeconomic environment, the impact of capital flows on emerging markets and to debate and engage on the management of sovereign debt issues.

Finally, 2016 will be remembered as a historical year thanks to the G20 leaders’ communiqué delivered in Hangzhou, which explicitly referred for the very first time to the Paris Club as “the principal international forum for restructuring official bilateral debt”. This statement is all the more symbolic that it was made under the auspices of the G20 Chinese Presidency, China having been also ad hoc participant of the Paris Club for the last few years.

Background notes

1. The Paris Club was formed in 1956. It is an informal group of creditor governments. It meets in Paris to coordinate policies, share information, and in some cases to meet with debtor countries to agree on restructuring their debts.

2. The members of the Paris Club are: Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Japan, Korea, the Netherlands, Norway, Russian Federation, Spain, Sweden, Switzerland, the United Kingdom and the United States of America.

3. The publication of an annual report, since 2008, is an example of Paris Club creditors’ commitment to enhance the transparency of the Club’s work and functioning.

4. The 2016 Paris Club annual report comprises five main chapters:

-- A chapter on the accession of two new members to the Paris Club,

-- A chapter on the celebration of Paris Club’s 60^th Anniversary,

-- A chapter on the strengthening of the Paris Forum and global co-operation on sovereign debt issues,

-- A chapter on the enhancing the co-operation with the private sector,

-- A chapter on the Paris Club’s contribution on the review of OECD guidelines on sustainable lending.

In addition to these five main chapters, the annual report includes detailed annexes on the current claims, function, principles of the Paris Club and the outstanding capital due by debtor countries.

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pr20170621_annual_report_2016.pdf

Event date:

Wednesday, 21 June, 2017 - 18:15

Paris Forum Workshop - Spring meetings

Workshop on sovereign debt

The Paris Forum gathers both sovereign creditors and debtors in order to foster discussions on pressing sovereign debt issues and with the participation of academics and NGOs; its 5th annual Conference will take place in November 2017.

Opening remarks: Guillaume Chabert, Co-Chairman of the Paris Club

How to prevent a new cycle of indebtedness and foster a sustainable financing of development?

Keynote speaker: Tao Zhang, Deputy Managing Director, IMF

First speaker: Jacques Assahoré Konan, Director General of the Treasury and Public Accounting, Côte d’Ivoire

Against a backdrop of economic and financial vulnerabilities in many low-income countries, the risks of a new cycle of over-indebtedness are real, including for countries that have already benefitted from debt relief initiatives such as HIPC. In that respect, it is vital to promote sound and sustainable financing practices as recognized in the Addis Ababa Action Agenda.

Key questions:

How to prevent a new cycle of indebtedness?
What lessons can be drawn by creditors and debtors from the HIPC initiative?
Why there cannot be a "HIPC initiative 2.0”?

How to ensure that private sector creditors adequately contribute to debt restructurings in the future?

First speaker: Kim Solberg, Ministry of Finance, Netherlands

Over the last decades, many middle- and low income countries have turned to external bond markets to finance their development needs. Since 1970, while the share of their external debt owned by official creditors remained broadly constant (45% vs 47%), commercial banks, who held 37% of their external debt, have largely been replaced by bondholders, who now own 42% of their external debt. This trend has gained momentum since the 2008 financial crisis and has particularly accelerated over the last few years for low-income countries.

Key questions:

How to deal with situations where only some of the commercial bondholders are covered by CACs?
How to keep commercial creditors on board during IMF programs and at what conditions?
How to convince commercial creditors to accept a debt exchange outside of situations of near-default? How to ensure that commercial creditors negotiate in good faith with debtor countries?

Concluding remarks

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2017-04_paris_forum_workshop_agenda.pdf

Event date:

Thursday, 20 April, 2017 - 14:00

Brazil becomes the 22nd member of the Paris Club

Following Korea on July 1^st, Brazil is the second important creditor to join the Paris Club this year. Brazil’s admission is a key step forward in the Paris Club’s enlargement to emerging creditors, which strengthens the Paris Club’s position as the principal international forum for restructuring official bilateral debt as it was recognized in the G20 leaders’ communiqué in Hangzhou.

Brazil’s Finance Minister, Henrique Meirelles, formalized Brazil’s accession to the Paris Club as the 22^nd member.

Brazil has been playing a growing role as a sovereign creditor over recent years and has a long history of cooperation with the Paris Club. Since 1985, Brazil has participated to 65 Paris Club negotiations as a creditor; these treatments have benefited 19 debtor countries.

As a Paris Club member, Brazil will be better able to influence the international financial agenda and have a greater say in future negotiations of sovereign debt restructurings. Brazil will abide by the Paris Club’s Principles –solidarity, consensus, information sharing, conditionality, case-by-case approach and comparability of treatment– which were designed as a framework for fostering an open and constructive dialogue among sovereign creditors.

Background notes

1. The Paris Club was formed in 1956. It is an informal group of creditor governments from major creditor countries and the principal international forum for restructuring official bilateral debt.

2. The members of the Paris Club are representatives of the governments of Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Ireland, Israel, Japan, Korea, the Netherlands, Norway, the Russian Federation, Spain, Sweden, Switzerland, the United Kingdom and the United States of America.

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Brazil to become the 22nd member of the Paris Club

Attachments:

pr20161129_admissionbrazil.pdf

Event date:

Tuesday, 29 November, 2016 - 19:30

4th Conference of the Paris Forum 2016

The Paris Forum kicks off reflections on operational guidelines for the sustainable financing of development.

Representatives of more than 40 sovereign creditor and debtor countries and of ten international financial institutions and international organizations met on 29 November 2016 at the 4^th Conference of the Paris Forum to lay the groundwork for future guidelines for sustainable financing.

This work builds on the Addis Ababa Action Agenda that was approved in July 2015 by the members of the United Nations. Creditors and debtors share a common role promoting sustainability and public debt management in developing countries. Signatories of the Addis Ababa Action Agenda took the commitment to elaborate operational guidelines to that purpose.

Participant countries agreed at the Conference of the Paris Forum that such guidelines could focus on transparency, coordination, resilience and consistency with the IMF and the World Bank’s debt frameworks.

The German G20 presidency will build upon this work to develop operational guidelines for the sustainable financing of development.

The 4^th annual conference of the Paris Forum gathered the Paris Club’s 22 permanent members, its ad hoc participants (South Africa and China), G20 members (Saudi Arabia, Argentina), other members of the European Union and developing countries (Côte d’Ivoire, Egypt, Gabon, Ghana, Madagascar, Mali, Namibia, Pakistan, Philippines, Senegal, Sudan, Thailand and Vietnam). International institutions such as the International Monetary Fund, the World Bank, the European Central Bank, the UNCTAD, the Commonwealth, the European Commission, the G24’s Secretariat, the G77’s Presidency, the United Nations and the OECD also participated in this Conference. Civil society was also represented by academics of the Federal Reserve Bank of Chicago and of the University of Munich, and by Non-Governmental Organizations.

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Press release

Subtitle:

Paris Forum

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pr20161129_paris_forum.pdf

Event date:

Tuesday, 29 November, 2016 - 19:15

Celebrating the 60th anniversary and welcoming Korea as the 21st member

On 1 July 2016, the Paris Club hosted an international conference at the French Ministry of Finance to celebrate its 60th anniversary and welcome Korea as its 21st member.

The Paris Club gathered high-level officials for an international conference in Paris to take stock of 60 years of sovereign debt restructurings and to discuss the current and forward-looking challenges of sustainable financing, orderly sovereign debt restructuring and more generally the international financial architecture of official debt.

At the end of this conference, the Paris Club proudly welcomed Korea as its 21st member. After almost 20 years of cooperation with the Paris Club, Korea has decided to become a full member. Korea’s membership will reinforce the Paris Club as the principal international forum for restructuring official bilateral debt, which allows more efficient, timely and orderly resolution of sovereign debt crises. It also demonstrates the Paris Club’s ability to expand its membership to emerging creditors on the basis of shared principles and to foster an open and constructive dialogue among sovereign creditors.

Equip2

Paris Club current and past teams met on 1 July 2016 on the occasion of 60 years of the Paris Club

Paris Club delegates

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pr60anniversarywelcomkorea.pdf

Event date:

Friday, 1 July, 2016 - 12:00

Meeting of the Paris Club with representatives of the private sector

Paris, June 30, 2016 – For the 16th consecutive year, the Paris Club and the Institute of International Finance jointly organized a meeting between official and private creditors, with the participation of representatives from the International Monetary Fund and the World Bank. Since its first edition in 2001, this forum has been a major event for dialogue between official and private creditors.

Public and private sector participants welcomed the opportunity to reflect on the joint efforts to improve the international system for sovereign debt restructuring. They emphasized the importance of open dialogue and transparency between sovereign debtors and all their creditors, underscoring the role of creditor-debtor cooperation for a successful prevention and resolution of sovereign debt crises.

Sovereign and private creditors reviewed the economic and financial outlook for developing and low-income countries. They exchanged, with the input of the International financial institutions, on the ongoing situation in Venezuela, and the ways in which the international community can be prepared to contribute to fostering recovery. Creditors extensively discussed the rising external indebtedness of developing countries, mostly through bond issuance over the past decade, which calls for enhanced creditor coordination – including through collective action clauses – in order to promote an efficient and timely sovereign debt resolution process when needed. They also underscored the challenges around the issue of data transparency, highlighting the role of uniform accounting and disclosure standards in reducing uncertainty while preventing potential debt buildup that could lead to crisis.

Public and private sector participants exchanged views regarding the ongoing initiatives to strengthen the contractual approach to sovereign debt restructuring and to promote resiliency in sovereign debt markets through the development of new instruments, with a special emphasis on GDP-linked bonds and on environmental contingencies.

Based on input by the IMF on the upcoming reform of its policy towards countries in arrears vis-à-vis private creditors, participants, finally, reviewed past experience and the challenges ahead to ensure the efficiency of sovereign debt restructurings through effective cooperation between public and private sector creditors, including through the annual IIF-Paris Club meeting.

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iif-pc_press_release_2016_.pdf

Event date:

Thursday, 30 June, 2016 - 00:00

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