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

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

Saddled with debt, reparations and oil capacity constraints, and with the security situation highly uncertain, Iraq has yet to achieve self sustaining economic growth despite the reduction in Paris Club debt.

A New Deal for Debt Overhangs?

You are liable for the debt.

Need for broader external debt relief

Debt sustainability indicators for Haiti are mixed.

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,

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.

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.

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.

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,

Taking note with great concern of the debt burden of many African countries, as debt servicing continues to drain the limited resources for development,

That is why, for domestic debt disputes, countries have bankruptcy laws and courts. But there is no such mechanism to adjudicate international debt disputes.

For countries that have reached the completion point, the challenge is to achieve lasting debt sustainability and avoid falling into a new debt trap.

However, while the HIPC initiative has removed the debt overhang for many countries, the burden of debt service payments remains high (see table 1).

Lower interest rates on loans are available in capital markets to borrowers who have ample debt service coverage , which is defined as total revenues available for debt service as a percentage of the required debt service.

Besides these cost savings, the active use of DMFAS in debt offices ensures that countries have an up to date database on debt, allowing more effective debt management and better preparation for loan and rescheduling negotiations.

Accordingly, the Panel recommends a 100 per cent debt cancellation for all low income countries, including those not eligible for debt relief under the HIPC initiative, and significant relief for middle income countries.

Unsustainable private debt problems must be resolved by defaults, debt reductions, and conversion of debt into equity. If, instead, private debts are excessively socialized, the advanced economies will face a grim future serious sustainability problems with their public, private, and foreign debt, together with crippled prospects for economic growth.

Nonetheless, Argentina s latest debt trauma shows that the global system for sovereign debt workouts remains badly in need of repair. Deepening domestic debt markets and perhaps change along the lines proposed by the IMF is sorely needed.

Even for those benefiting from the HIPC Initiative, the economic conditions on which their debt relief was based have considerably worsened, and several countries, including those few that received debt relief, have backtracked into further unsustainable debt.

We recognize that the agreement does not cover bilateral debt and debt owed to other multilateral credit institutions, and we call for measures to address those issues in order to address the debt burden in Africa comprehensively.

Obama has remained silent about reform of Medicare and Social Security, whose long run deficits are several times the national debt. Vice President Joe Biden has even said that no changes to Social Security are to be made.

Debt

Debt

That debt is ethically unrecoverable for the peoples of the world.

For many heavily indebted non HIPC and middle income countries, debt sustainability will require significantly more debt reduction or restructuring than has yet been proposed.

C. The Group of Eight proposals for debt cancellation for Heavily Indebted Poor Countries