G7 open door to 100% debt cancellation - but don't deliver yet

The '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.

As the Finance Ministers met for dinner before their meeting, Jubilee Debt Campaign presented them with over 8,000 postcards and emails demanding that they Wipe Out Debt - just a sample of at least 30,000 messages that had been sent to Gordon Brown and the other ministers in the last few weeks before the meeting. World Development Movement, a member of the Jubilee Debt Campaign coalition, also set up a counter outside the meeting to show how many children died because of preventable poverty while the ministers were talking: one every three seconds, or more than 26,000 during the course of the meeting.

Jubilee Debt Campaign welcomes the fact that the G7 has finally accepted the arguments of debt campaigners around the world, that some countries need and deserve 100% debt cancellation. We are now intensifying our efforts in the next few months to make clear that the world now expects them actually to deliver 100% debt cancellation, without harmful strings attached and without raiding aid budgets to do it.