Brazil and France co-chair Paris Forum meeting with creditors

The Paris Forum, an informal network of creditor countries, had its 11th meeting on June 26 at the French capital. For its 2024 edition, coordination of the yearly summit was shared by France and Brazil, which currently holds the G20 presidency.

Ambassador Tatiana Rosito, secretary for International Affairs at Brazil's Finance Ministry and coordinator of the G20 Finance Track, represented Brazil, with Bertrand Dumont, French Treasury director general, as co-chair. The debates addressed the "Common Framework", a G20 initiative established in 2020 to deal with low-income country debt. In addition to traditional creditor nations gathered at the Paris Club, other important creditors and group members, such as China, India and Saudi Arabia, were also in attendance.

"As we all know, the current picture for sovereign debt risk and vulnerability is bleak, with high levels of indebtedness and debt payment costs posing considerable barriers to economic stability and growth. Low-income countries are the most impacted. External debt in poor countries has risen by 60% over the last decade," said Rosito.

The ambassador emphasized that sovereign debt must be addressed in light of the issues related to Brazil's agenda for the G20, but added that particular steps must be implemented.

"The discussions of debt during the G20 presidency and in various other forums confirm a consensus that debt problems should not be considered in isolation," she said. Solutions to debt challenges must involve a multifaceted and comprehensive approach, including the international financial architecture and the pattern of capital flows, as well as the Multilateral Development Banks (MDBs), global governance reform, growth reforms, domestic resource mobilization and improved debt restructuring mechanisms, she said. "Despite this, it is clear that a pressing short-term factor is rising debt servicing costs. This highlights the discussion of how to provide liquidity in the short term to avoid development setbacks," she added.

The panels were attended by finance ministers and representatives from international organizations, private financial institutions, non-governmental organizations and academia. Among the delegations represented at a high level were Argentina, China, Ghana and Cameroon, organizations such as the IMF and the World Bank and many representatives from civil society organizations.

The International Financial Architecture Working Group of the G20 Finance Track has prioritized the issue of debt, particularly on initiatives that amplify the voices of debtor countries, especially in Africa. The Brazilian G20 presidency hosted a high-level conference with the United Nations and African G20 members in February. In June, it hosted a debate led by government officials and African civil society organizations during the Working Group’s third meeting in Fortaleza.

Founded in 1956, the Paris Club is an informal organization of official creditors tasked with developing coordinated and long-term solutions to borrowing countries' payment challenges. Brazil has been a member of the organization since 2016, represented by its Finance Ministry.

The 22 members of the Paris Club are Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Japan, Korea, the Netherlands, Norway, the Russian Federation, Spain, Sweden, Switzerland, the United Kingdom and the United States of America. South Africa has been a prospective member since 2022.