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Paris Club
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last edited
by PBworks 15 years, 9 months ago
Paris Club
- Informal group of nations creditors that will meet to reschedule debt of countries in trouble.
- They require an IMF agreement first
- Just for imminent defaults
- meeting is a response to crisis (not to avoid one)
- Imminent default principle rationale is attributed to creditors desire to limit the frequency of requests for debt relief
- Offer short term focus
- temporary relief
- assumes that balance of payments problems are result of inappropriate domestic policies
- reschedulings are conditional upon IMF deal first
- IMF deal assures creditors that debtor country will enact policies that improve its ability to service debts, and they provide a monitoring mechanism to evaluate future requests.
- will ask all other creditors to share burden (except groups like IMF and World Bank)
- Meetings take about 1-2 days
- Results are not immediately binding, but then debtor nation then has to sign bilateral agreement with each creditor (not all of which are there).
- The process has set steps, and everyone knows what to expect. Very formal procedure.
Paris Club
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