While the EU’s post-Covid-19 green recovery dominated the Ecofin Council meeting on Tuesday 16 February, EU finance ministers also had a preliminary discussion on how the EU can help finance the recovery of the poorest non-Member States that are under threat from a tsunami of public debt.
The aid would be part of an EU initiative for global recovery, for which the Commissioner for International Partnerships, Jutta Urpilainen, presented ministers with the Commission’s plans for closing the financing gap, both globally and at the level of individual countries (see EUROPE 12656/4).
“We have started discussions on how to ensure that the EU provides a strong and coordinated action to help low-income countries in need in the best possible way”, given that half of them “are currently at high risk of or already in debt distress”, said the Portuguese Finance Minister, João Leão, at the end of the ministerial videoconference.
The aim of this discussion was to prepare the next international meetings on this subject - those of the IMF and the G20 in April and the summit on the financing of African economies to be organised by the French President in Paris in May, as announced by Mr Macron at the European Council in October 2020 (see EUROPE 12583/5).
The Portuguese minister confirmed on this occasion that “in the context of efforts to support developing countries and their recovery”, the Portuguese Presidency will host “a high-level EU/Africa green investment forum in Lisbon in April, in collaboration with the European Investment Bank” (EIB). The forum, scheduled for 23 April, will focus on the energy transition and green investment in Africa.
Among the measures envisaged to help middle-income countries, Executive Vice-President of the European Commission Valdis Dombrovskis mentioned: - the extension of the G20 Paris Club Debt Service Suspension Initiative (DSSI) in favour of the most vulnerable countries, “which the EU promotes as a major achievement of cooperation at the multilateral level”; - a new allocation to the IMF, over and above the €183 million already allocated by the EU to the IMF’s Disaster Reduction and Relief Fund (DRRF), for debt relief for 29 low-income countries; - the strengthening of tax policy and tax administration in these countries.
A re-issue of the IMF’s Special Drawing Rights, supported by several Member States including Germany, France and Italy, is also on the table. (Original version in French by Aminata Niang)