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G7 finance ministers called for full implementation of G20 debt freeze – U.S. Treasury

Group of Seven finance ministers on Monday called for full implementation of a G20 freeze in debt service payments by all official bilateral creditors and adherence to debt data transparency standards, a U.S. Treasury spokesperson said in a statement.

In a teleconference held early Monday, the G7 ministers also discussed domestic and international economic responses to the coronavirus pandemic and strategies to achieve a robust global recovery, a Treasury statement said.

In addressing the G20 Debt Service Suspension Initiative offered to the world’s 73 poorest countries through the end of the year, the ministers discussed the need for China, a G20 member and major creditor, to participate fully and transparently, a senior administration official said.

“It’s key, both to realizing the full potential of the DSSI and from a transparency perspective,” the official said.

G20 finance ministers are to discuss the debt moratorium during a teleconference on Saturday amid growing calls for an extension, given a deeper downturn in the global economy that will hit heavily indebted countries particularly hard.

The International Chamber of Commerce, the International Trade Union Confederation and a major civil society group on Monday urged G20 members to extend and expand a freeze in debt service payments.

So far, 41 countries have applied for relief under the DSSI and the Paris Club has signed agreements with 20 countries ranging from Ivory Coast to Ethiopia and Pakistan.

World Bank President David Malpass last week backed an extension of the debt payment freeze through 2021 and said some heavily indebted countries would need debt forgiveness to avert a longer “poverty trap.”

Malpass emphasized the need for increased transparency about lending and said all official bilateral creditors, including policy banks such as China’s Development Bank, and state-owned enterprises with implicit government guarantees should take part.
Source: Reuters (Reporting by Andrea Shalal and David Lawder; Editing by Dan Grebler)

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