Koln G7 Statement

Sectors : Debt relief
Organisation : G8
Date made: 
Heads of State

Commitments in: Financing for Development - Debt relief

“9. ...We therefore call for an expanded initiative that will provide faster, broader and deeper debt relief...

...11. We welcome and endorse the Report of our Finance Ministers on the Köln Debt Initiative...We also ask the Paris Club and other bilateral creditors to forgive commercial debt up to 90 % and more in individual cases if needed to achieve debt sustainability, in particular for the very poorest among these countries. In addition to these amounts, we call for full cancellation on a bilateral basis, through various options, of Official Development Assistance (ODA) debt...

12. If implemented, the debt stock of countries possibly qualifying under the HIPC Initiative would be reduced, from some US $ 130 billion in nominal terms (US $71 billion in net present value) remaining after traditional debt relief, by an additional US $ 50 billion in nominal terms (US $27 billion in net present value). These measures, together with forgiveness of debts arising from Official Development Assistance, of which up to US $20 billion in nominal terms are owed to G7 countries, would reduce the overall debt stock by more than half, lowering the debt service burden significantly and freeing resources for priority social spending.

13. We recognize that these changes will entail significant costs, in particular arising from debt owed to the IFIs. We are prepared to support a number of mechanisms to meet these costs recognizing the importance of maintaining an adequate concessional lending capacity by the IFIs...”