G7 Ministers urge private sector debt relief for poorest nations

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Bank of Japan Governor Haruhiko Kuroda (R, back) and Japanese Finance Minister Taro Aso hold a press conference in Tokyo on April 14, 2020, after attending a videoconference of finance chiefs from the Group of Seven industrialized nations. The G-7 finance ministers and central bank governors agreed to provide debt relief to help developing countries finance emergency measures against the spread of the new coronavirus. (Photo by Kyodo News via Getty Images)
Bank of Japan Governor Haruhiko Kuroda (R, back) and Japanese Finance Minister Taro Aso hold a press conference in Tokyo on April 14, 2020, after attending a videoconference of finance chiefs from the Group of Seven industrialized nations. The G-7 finance ministers and central bank governors agreed to provide debt relief to help developing countries finance emergency measures against the spread of the new coronavirus.
(Photo by Kyodo News via Getty Images)

G7 finance ministers on Friday reiterated their call for private lenders to participate in a debt suspension program for the poorest nations that was announced in April as the coronavirus attacked global economies.

“We reiterate our call for private creditors to implement the DSSI on a voluntary basis when requested by eligible borrowers,” the bloc said in a statement released by the US Treasury, referring to the Debt Service Suspension Initiative.

Finance ministers and central bankers from the G20 had earlier in the year endorsed an immediate one-year debt suspension for the poorest countries, which are particularly vulnerable to the economic impacts of the Covid-19 pandemic.

The Friday statement from the seven most-industrialized nations — the United Kingdom, Canada, France, Germany, Italy, Japan and the United States — supported extending this initiative, known as DDSI.

“Recognizing the ongoing financial needs of low-income countries, we support extending the DSSI in the context of a request for IMF financing,” the ministers said.

They added that the extension “should reflect the G20’s commitment to transparency and creditor coordination… as well as (reflect) the need for fair burden sharing among all creditors.”

The ministers also said they “strongly regret” moves by some countries to classify state-owned financial institutions as commercial lenders to avoid participating in the initiative.

G20 finance ministers are meeting next month, and the statement also calls on them to agree on terms for further debt relief for poor nations.

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