Brussels, 13/06/2005 (Agence Europe) - Thanks to the agreement between G7 finance ministers for totally getting rid of the debt for eighteen poor and heavily indebted countries in Africa and Latin America but which are examples of good governance, the preparation of the G8 summit (in Gleneagles, Scotland in July) under the British presidency made a leap forward on Saturday in London, to the great satisfaction of the countries concerned and British Chancellor Gordon Brown.
The gesture decided on by the main money lenders in the most industrialised countries of the world (G8, excluding Russia) focuses on USD 40 bn, representing the debt of these countries to the World Bank, African Development Bank (ADB) and the International Monetary Fund (IMF) Benin, Burkina Faso, Ethiopia, Ghana, Madagascar, Mali, Mauritania, Mozambique, Niger, Uganda, Rwanda, Senegal, Tanzania, Zambia, Bolivia, Guyana, Honduras, Nicaragua, will be the beneficiaries of the agreement. Short schedules (a year and a year and a half) could apply to nine other poor and SILIC (Severely Indebted Low Income Countries (according to the terminology of the IMF and World Bank) could also swell their ranks. Debt efficiency will be compensated by a signifant increase in Public Development Aid (PDA) from rich countries over the next three years so that loss of earnings from PDA to the World Bank, resulting from non-reimbursement of loans and their interest payments, will not penalise other developing countries. This is a victory for the idea defended by France, Germany, Japan, against the USA supported by the United Kingdom. The IMF will itself fund part of the lost earnings but without having to dip into its gold reserves.
Another reasons for satisfaction for the EU, is the Franco-German pilot project for specific development projects or additional resources of PDA by way of a voluntary tax on plane tickets (the idea was initially launched by President Chirac) and received some praise. The United Kingdom supported it and the final G7 press statement mentioned it. This bodes well for the G8, which is expected to progress on finding new mechanisms for financing International Development Aid (IDA).
The European Commission recently received a mandate from EU finance ministers to examine the feasibility of the Franco-German project in view of its possible extension to all EU Member States in the voluntarily or in compulsory form (EUROPE 8963). Jean-Claude Juncker, president of the European Council and the Ecofin Council, will, together with European Commissioner Joaquin Almunia, represent the EU at the G7, said that the project had his blessing.