G7 open door to 100% debt cancellation - but don't deliver yet
February 2005The 'G7' club of the world's richest and most powerful nations has for the first time publicly accepted the principle - long argued by debt campaigners - that some countries need 100% debt relief. We are now demanding that they follow this up by actually cancelling 100% of the debts of the most impoverished countries. The Finance Ministers of the G7 - Canada, France, Germany, Japan, Italy, the UK and the US - met in London on 4 and 5 February 2005. In their final communique, they agreed to review the debts of the countries within the Heavily Indebted Poor Country (HIPC) initiative, based on a "willingness to provide as much as 100% multilateral debt relief". They also referred to the possibility of using IMF gold reserves to fund debt cancellation. This the first time that all the G7 nations have accepted that some countries may need 100% of their debts cancelled, rather than the limited - and woefully inadequate - relief so far offered through HIPC. However, the communique did not commit to any specific actions, or offer any new money for debt cancellation. Nor did it address the crucial issue of the strings often attached to debt relief. Jubilee Debt Campaign and other organisations are demanding that creditors must stop making debt cancellation conditional on impoverished countries implementing economic policy reforms - such as enforced privatisations or cuts in public spending, which can harm the populations of poor countries as much as the original debts.