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Paris Club

Page history 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.

 

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