We heard a strong welcome for recent progress on aid and debt, although many members expect further action on debt, more quickly and in more countries.

But there were also calls for action on the issue of debt in all heavily indebted African countries.

At their eleventh meeting (Maputo, March 2005), the HIPC ministers called for help in building their capacity to analyse debt sustainability and create a framework for action.

Options for lower debt burdens on Governments of heavily indebted developing countries include debt cancellation and debt swaps for sustainable development.

The report calls for a major scaling up of investments in development, as well as for stronger and more effective international action on debt relief, trade and science and technology.

Action on debt relief and trade reform to benefit low income countries should also reflect the Millennium Development Goals.

Debt relief, debt swaps or debt cancellation could offer important means for mobilizing resources for accelerating progress towards the water and sanitation goals.

Action on debt relief vital because it provides the certainty needed to hire the doctors and the teachers, and to buy the drugs.

Part and parcel of international support for action on national priorities includes meaningful measures on means for implementation, in particular those related to commitments made but not honoured, reform of the trade regime and debt relief.

A New Deal for Debt Overhangs?

You are liable for the debt.

Need for broader external debt relief

In addition to sustainable debt management, urgent action needs to be taken in order to do away with agricultural subsidies, in particular cotton subsidies.

Debt sustainability indicators for Haiti are mixed.

So the eurozone has some albeit limited fiscal space. Debt levels and remaining deficits underscore the need for extreme caution, but, assuming a common will to undertake action, there would be room for maneuver within the European rules.

For this to happen, there must be urgent action on various international commitments and sustained global partnership for providing resources, trade opportunities and debt relief measures to least developed countries, taking into account their special needs and vulnerability.

15. Reiterates the importance of the orderly resolution of sovereign debt crises, notes the increasing voluntary use of collective action clauses in international sovereign bonds, and takes note of the efforts led by sovereign debtors and private creditors to develop a voluntary code of conduct for the resolution of sovereign debt crises

UNCTAD should continue its work in the area of debt, including the study of the application of debt for equity swaps for development.

Debt sustainability and debt relief

Thus, the Paris Club's Evian approach relies on IMF Debt Sustainability Analysis for determining the terms of debt reschedulings.

Concerned that many developing countries continue to struggle for a durable solution to their serious debt problems, where continuing debt and debt servicing obligations adversely affect their sustainable development,

The group called for special efforts by the international community to help LDCs meet their development targets in the light of the Brussels Programme of Action, particularly through aid, FDI, market access and debt relief.

In addition to measures for the HIPC, steps were being taken to implement specific debt restructuring methods, such as the Evian approach adopted by Paris Club participants and the collective action clauses encouraged by IMF.

Such contracts should also include collective action clauses, which make it impossible for vulture funds to hold up debt restructuring. When a sufficient proportion of creditors agree to a restructuring plan (in the case of Argentina, the holders of more than 90 of the country s debt did), the others can be forced to go along.

Finally, GDP indexed bonds and other tools for dealing sensibly with unsustainable debt could be applied exclusively to member states debt not covered by the program and in line with international best practices for sovereign debt management.

At the same time, more decisive action should be taken to achieve the eighth goal of the Millennium Declaration developing a global partnership for development, especially in the key areas of aid, debt relief and trade.

We welcome the recent G 8 Africa Action Plan, which promises debt relief, increased aid flows, a commitment to improving global market access for African exports, and an agreement to provide medical assistance to the continent.

Noting with concern the continuing debt and debt servicing problems of heavily indebted developing countries as constituting an element that adversely affects their development efforts and economic growth, and stressing the importance of alleviating once and for all, where applicable, their onerous debt and debt service burden with the aim of attaining a sustainable level of debt and debt service,

11. Also stresses the need to find a solution for the debt problems of heavily indebted low and middle income developing countries that are not eligible for debt relief under the Heavily Indebted Poor Countries Initiative, and in this regard continues to encourage the exploration of mechanisms to comprehensively address the debt problems of those countries, which may include debt for sustainable development swaps or multicreditor debt swap arrangements, as appropriate

Fifth, debt burdens that cannot be eased by growth, savings, or inflation must be rendered sustainable through orderly debt restructuring, debt reduction, and conversion of debt into equity. This needs to be carried out for insolvent governments, households, and financial institutions alike.

After Argentina s unilateral default in 2001, many investors saw more clearly the need to allow explicitly for less drastic alternatives ahead of time, and so incorporated so called collective action clauses into debt contracts. If the borrower runs into trouble, CACs make it possible to restructure debt with the agreement of a substantial majority of creditors (usually around 70 ).

The demand for debt repayment confronts the philosophy of debt forgiveness. In the lender s view, the 17 interest rate that Greece s government now has to pay for its 10 year bonds accurately reflects the lender s risk in buying Greek government debt.

(g) To establish effective debt tracking mechanisms in developing countries and strengthen technical assistance for external debt management and debt tracking, including through enhanced cooperation and coordination between organizations providing assistance in this regard

Most economists failed to foresee the economic dynamics that actually led to the crisis, because they failed to pay enough attention to the rapid increase in US total debt. Instead, they focused exclusively on US foreign debt, ignoring household debt (mortgage and consumer debt), public debt, business debt, and financial debt.

Such a debt conversion program would offer five benefits. For starters, unlike the ECB s current quantitative easing, it would involve no debt monetization.

Of the 42 countries qualified as potentially eligible for debt relief in September 2004, 27 had received debt service relief of 32 billion.

For instance, the SADC countries have a total debt stock of 78.1 billion, with an annual total debt service amounting to 6.8 billion.

Can we engineer new debt contracts for countries like Argentina?

Who, if anyone, will assume responsibility for any national debt?

Several participants expressed the need for unconditional cancellation of debt.

A third crucial issue was debt relief for poor countries.

Action against global warming would take place without delay. But a decade or so later, governments and societies more broadly would need to choose between taxation, debt, and inflation.

PRINCETON Any economic slowdown increases debt burdens, whether for households or for states. Today, both are looking for ways to reduce the weight of debt and some would prefer to escape it.

Under Chapter 11, companies with a solid underlying business generally swap debt for equity. Old equity holders are wiped out and old debt claims are transformed into equity claims in the new entity which continues operating with a new capital structure. Alternatively, the debt holders can agree to reduce the face value of debt, in exchange for some warrants.

Emphasizing the importance of finding a durable solution for those developing countries that have difficulties in meeting their external debt and debt servicing obligations,