The European Union announced, on Monday 23 November, that it will contribute €183 million to the IMF’s Catastrophe Containment and Relief Trust (CCRT) for debt relief in 29 low-income countries, allowing them to increase their social, health and economic spending in response to the COVID-19 crisis.
The announcement comes after the G20 summit under the Saudi presidency approved, last weekend, a common multilateral framework for the coordinated treatment of debt beyond the Debt Service Suspension Initiative (DSSI) (see other news and EUROPE 12602/5).
This EU contribution is in line with the proposal made last May by the President of the European Commission, Ursula von der Leyen, for a global recovery initiative linking investment and debt relief to the UN’s Sustainable Development Goals (SDGs) (see EUROPE 12495/11).
“The EU is combining injections of funds for the rapid easing of budgetary constraints to help the immediate response - through contributions like this one - with a sustained longer-term plan to assist partners in weathering a severe social-economic storm, which is far from over”, the High Representative of the Union for Foreign Affairs and Security Policy, Josep Borrell, said in a statement.
He expressed the hope that this EU contribution “will pave the way for others to join those global efforts”.
Recalling that “debt levels were already high before the crisis” and that “in many countries they are now simply becoming unsustainable”, the European Commissioner for International Partnerships, Jutta Urpilainen, insisted on the Commission’s determination “to continue to help its partner countries in maintaining their path toward the SDGs despite dire financial situations”.
With this €183 million contribution, the EU becomes the largest donor to the CCRT, which currently totals almost €426 million in donations. (Original version in French by Aminata Niang)