In News
- Paris Club is likely to give the IMF financial guarantees about the Sri Lankan debt.
Key points:
- The Paris Club is an informal group of mostly western creditor countries.
- It grew from a 1956 meeting in Paris between Argentina and its public creditors.
- Its objective is to find sustainable debt-relief solutions for countries unable to repay their bilateral loans.
- The members of the Paris Club are also members of the Organisation for Economic Co-operation and Development (OECD).
- Members: Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Japan, Netherlands, Norway, Russia, South Korea, Spain, Sweden, Switzerland, the United Kingdom and the United States.
- Since its inception, the Paris Club has reached 478 agreements with 102 different debtor countries, with a total treated debt of $614 billion.
- The Paris Club operates on the principles of consensus and solidarity and any agreement reached with the debtor country applies equally to all Paris Club creditors.
- The club used to be a dominant bilateral lender in the last century, but its importance has diminished with the emergence of China as the world’s largest bilateral lender.
- In the case of Sri Lanka, China, Japan, and India are the largest bilateral creditors, with Japan being a member of the Paris Club.
Source: TH
