IMF tinkers with G8 debt deal

16 December 2005

IMF tinkers with G8 debt deal

SP Member of Parliament Ewout Irrgang has expressed concern that the IMF executive is about to take a decision, at a meeting scheduled for next Wednesday, to defer the G8's agreed debt forgiveness for six of the eighteen countries affected by the deal. Debts would not be cancelled until the countries in question – Ethiopia, Madagascar, Mauritania, Nicaragua, Rwanda and Senegal – had taken poorly-specified “remedial actions”.

Ewout IrrgangIt appears strongly as if the IMF executive is seeking to impose an IMF programme as the price of debt relief. Four of these six countries are not currently subject to such a programme, or have been subject to one which expires at the end of this year. Deferring debt forgiveness for a third of the eighteen affected countries would go against this summer's G8 deal, whose only condition was that the so-called “HIPC target” be reached. This referred to an earlier debt relief programme and thus imposed no new conditions. Yet the IMF seems now to be coming back with new demands.

Mr Irrgang has put written questions to the Ministers of Finance and of Development Cooperation asking for clarification of the IMF's intentions, which will also tell him just what the position of the Dutch representative on the Fund's executive is.

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