The debate about how to deal with the debt crisis has been high on the agenda since the COVID-19 pandemic. From the heads of the World Bank and UNESCO, from African finance ministers and the Alliance of Small Island States to global debt relief initiatives and the Pope – all over the world, people are calling for further debt relief for the countries of the Global South.
Many years ago, developing countries in the United Nations called for a resumption of negotiations on sovereign debt restructuring processes. The urgency of this request has been further emphasized by the consequences of the pandemic.
Against the background of the upcoming elections for the German parliament in 2021, the “erlassjahr.de – Entwicklung braucht Entschuldung e. V“, a German coalition of NGOs campaigning for debt relief for countries in the Global South whose members include KOLPING INTERNATIONAL launched a campaign called “No development without debt relief – include sovereign debt restructuring in the coalition agreement”. This campaign wants to make sure that the future German government will take demands from the Global South seriously, making fair sovereign debt restructuring processes an integral part of its policies.
Dr. Markus Demele, General Secretary of KOLPING INTERNATIONAL points out: “We urgently need sovereign debt restructuring processes. This item has been high on the list of requests by development economists for many decades and it must finally be made a reality.“ In collaboration with its international partners, the new German government must take the following steps to devise sovereign debt restructuring processes:
- Existing sovereign debt restructuring mechanisms must be made available to all critically indebted developing countries and newly industrialized countries.
- Debt cancellation must be made possible, limiting debt service to mere debt relief will not suffice.
- All – including multilateral and private – creditors must be obliged to become part of debt relief measures.
- Illegitimate debts must be cancelled.
For more information, please go to https://erlassjahr.de/en