The President of the Government, Pedro Sanchez, announced an alliance to reduce the debt of developing countries with the United Kingdom, France, Canada, Barbados and several international organizations, and also said that he would release a national mechanism to remove up to 60 million euros per year. In action, under the International Conference on the Financing of the UN Development, he said that these resources will be directly reinvestable in sustainable development programs.
The Interprecian Bank for Development, the Bank of the Development of Asia and the African Development Bank, as well as the European Investment Bank, the Development Bank of Latin America and the Caribbean (CAF). This international coalition seeks to speed up the systematic inclusion of provisions on suspension of debt in state and private financial instruments.
These provisions make it possible to temporarily suspend debt payments for extraordinary events, such as natural disasters, food crises or emergency situations in the field of sanitary conditions, offering lending countries an immediate financial space to respond to a crisis without subjecting their solvency or their ability to distribute social expenses. Its acceptance contributes to a more stable and predictable development structure for the crisis.
The alliance was born as an open and flexible coalition, which seeks to combine the overall structure based on transparency, monitoring and trust between creditors and debtors. Among its goals is to promote the systematic acceptance of these provisions in bilateral, multilateral and commercial loans. In addition, he seeks to develop general principles and standard contractual language, thereby creating a transparent regulation that mobilizes the private sector.
The Minister of Economics, Commerce and the Company, Carlos, at the press conference explained that with this initiative it is intended to create an immediate financial space during the greatest need, allowing countries to concentrate their resources on responding and restoring, without exposing their solvency risk or their ability to cope with their social expenses.
Studying debts for investment
Similarly, Pedro Sanchez indicated that Spain has released the initiative to promote debt exchange for investment, a tool for redirecting resources directly to actions against climate change, sustainable infrastructure or public services and will comply with sustainable development goals.
In his opinion, this is an initiative that “works”, but its use is complex, and in the past there was not enough consistency and sufficient scale to be effective. Therefore, in this case, they signed the “Debt Center” with the World Bank, which will serve as a platform that will help its implementation by state and private entities.
The so -called “Global Center for Debt for Development” is aimed at helping developing countries to reinvesting funds used to finance their debt into projects in areas of high social influence, such as healthcare, education, climatic adaptation, food security and biodiversity.
Alun will allow technical assistance to governments, standardize legal and financial documents and create global coordination and training space. The initiative was developed by Spain in cooperation with the World Bank and was opened to participate in other international partners, including multilateral agencies, donors, financial institutions and civil society organizations.
