Brussels, 05/03/2002 (Agence Europe) - With the adoption of the report by Mario Mantovani (Forza Italia) on additional debt relief for the highly indebted poor countries (HIPC) that are among the least developed ACP countries, the European Parliament's Committee on Development took a stance in favour of accelerating and consolidating the public debt relief process of the countries whose governments respect human rights and the principles of good governance, and that make elimination of poverty a priority. MEPs note in this respect that increased public spending effectiveness is an effective way to contribute to reducing poverty, and that the additional resources that the governments will make available through debt relief should be allocated to social projects, mainly education, primary healthcare, and the fight against AIDS.
The Mantovani report comes in response to a Commission communication concerning the position that the Community must adopt within the ACP/EU Council of Ministers regarding the balance of special loans granted in the context of the first three Lomé Conventions, and that the least developed ACP countries should also settle all the other HIPC debt relief mechanisms once applied (in the context of the joint IMF/World Bank initiative to which the European Union contributes with one billion euros). The Commission proposes that the least advanced ACP countries crossing the "decision threshold" in the context of the HIPC debt relief mechanism should immediately benefit from total liquidation of debt servicing linked to special loans (long-term loans granted from EDF and EIB resources).
The rapporteur welcomes the Commission's proposal as a further gesture that usefully completes the actions carried out in favour of the less developed countries. He stresses that the ability of the heavily indebted poor countries to provide basic social services such as healthcare and education to their populations is heavily hampered by the debt service which accounts for 40% of the income brought in by these countries' natural resources, and that the trap of the debt generates a downward spiral of growing poverty that puts a brake on the development of countries already affected by the slowdown in the world economy further to the events of 11 September.
The idea of simply cancelling out the debt - over and beyond the cancellation of debt service - was not retained (all amendments along these lines were rejected).