To ask the Chancellor of the Exchequer, with reference to the Debt Service Suspension Initiative agreed by the G20, what assessment he has made of the proportion of debt payments that are owed to private creditors governed by UK law.
18 May 2020
HM Government is deeply concerned by the impacts of COVID-19 on low-income developing countries. The G20 Debt Service Suspension Initiative (DSSI) is an important measure to provide rapid liquidity support to the most vulnerable countries.
The DSSI requires eligible countries to commit to use the created fiscal space to increase social, health or economic spending in response to the crisis. The International Monetary Fund (IMF) and World Bank Group (WBG) will support monitoring of this. Countries are also required to commit to disclose all public external debt in line with the framework of the IMF and World Bank Group (WBG) multipronged approach for addressing debt vulnerabilities.
The Chancellor and his G20 counterparts called upon commercial creditors to participate in the DSSI on comparable terms to the official sector on a voluntary basis. In 2019 the IMF assessed that 45% of the total outstanding stock of international sovereign bonds by nominal principal amount are governed under English law.
HM Government is working closely with Institute of International Finance (IIF) and commercial creditors to support implementation of comparable debt service suspensions from the private sector. Following a recent meeting with the Paris Club of official creditors, of which the UK is a member, the IIF released a statement that its members have “expressed strong support for the DSSI and are committed to explore how best to advance this initiative on comparable terms”.
HM Government will continue to monitor implementation of the DSSI by private lenders under this voluntary framework closely, as it is important that all creditors work together to help enable countries especially vulnerable to the pandemic to protect their citizens and economies.