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EU supports more funds for IMF, extension of debt relief for poor countries

European Union finance ministers on Tuesday backed the idea of boosting IMF funding and extending debt relief for the poorest countries to help the global fight against the COVID-19 crisis.

The idea of increasing the International Monetary Fund’s resources, called Special Drawing Rights (SDRs), so that the lender of last resort can help more low-income countries appeared last year. Officials mention amounts ranging from $500 billion to $1 trillion.

And last year the G20, the group of the world’s 20 biggest economies, approved a Debt Service Suspension Initiative, offering 73 of the poorest countries a six-month suspension of government-to-government debt payments.

The initiative has already been extended once and will be discussed again at the next G20 meeting, in April.

“Ministers discussed today how to support the world’s poorest countries, many of which are at high risk or in debt distress,” European Commission Vice President Valdis Dombrovskis told a news conference after the EU ministers’ talks.

He said the steps discussed included extending the Debt Service Suspension Initiative and supporting a new general allocation of IMF Special Drawing Rights, though this would require thorough analysis by the IMF.
Source: Reuters (Reporting by Jan Strupczewski; Editing by Kevin Liffey)

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