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G20 debt-relief initiatives for low-income countries during the pandemic

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  • José Ramón Martínez Resano
  • Sonsoles Gallego

Abstract

The serious economic impact deriving from the COVID-19 pandemic on already ailing low-income countries has prompted the search for support instruments among the international financial community. The official debt moratorium agreed by the G20 for these countries in the spring of 2020 has brought a modest temporary relief to their public finances. However, the agreements reached among official creditors could facilitate consensus on farther-reaching initiatives for the resolution of debt problems in the international sphere. In this connection, the fact that an agreement has been reached by the G20 on a “common framework for debt treatments” is an important precedent for coordination among official creditors. This article puts the debt-relief measures agreed and the challenges associated with their application into context. Their implementation and effectiveness will depend on the degree of coordination achieved in practice by creditor countries.

Suggested Citation

  • José Ramón Martínez Resano & Sonsoles Gallego, 2021. "G20 debt-relief initiatives for low-income countries during the pandemic," Economic Bulletin, Banco de España, issue 3/2021.
    • Handle: RePEc:bde:journl:y:2021:i:09:d:aa:n:18
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    References listed on IDEAS

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    1. Valentin Lang & David Mihalyi & Andrea F. Presbitero, 2023. "Borrowing Costs after Sovereign Debt Relief," American Economic Journal: Economic Policy, American Economic Association, vol. 15(2), pages 331-358, May.
    2. M. Ayhan Kose & Peter Nagle & Franziska Ohnsorge & Naotaka Sugawara, 2021. "Global Waves of Debt," World Bank Publications - Books, The World Bank Group, number 32809.
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    More about this item

    Keywords

    Sovereign debt restructuring; DSSI; Common Framework.;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F35 - International Economics - - International Finance - - - Foreign Aid

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