Eurodad statement to Financing for Development Forum at the UN

Added 24 May 2017
Addressing the Financing for Development (FfD) Forum at the UN in New York, Eurodad’s Bodo Ellmers made this statement on behalf of the Addis Ababa CSO Coordination Group concerning the failure to address debt crises:

“One unfortunate development on country level recently is a new wave of debt crises that have disastrous humanitarian and developmental consequences. The plans to use billions of grants to mobilise trillions of new debt – plans that have also been presented by the panelists here - makes things even worse. 

“Looking at the outcome document of this FfD Forum, we find the analysis on new debt crises risks is correct. But we also find that the conclusions in terms of governance reforms are far from what is needed. We all know that we don’t have fully effective institutions in place to prevent debt crises, or to resolve them in a fair and speedy way when prevention fails. As the negotiations are closed, we missed an opportunity here. But we can still use this forum to lay the groundworks for necessary governance reforms. Let me name two:

“It becomes ever more important that both borrowers and lenders, public and private, comply with responsible lending and borrowing principles. The Addis agenda commits in paragraph 97 to, I quote: ‘work towards a global consensus on guidelines for debtor and creditor responsibilities in borrowing by and lending to sovereigns.’ But this process still needs to be initiated at the United Nations, and we urge all Member States to initiate this process before we convene for the next Financing for Development Forum.

“We need effective institutions to resolve debt crises in a fair and speedy manner, mechanisms that safeguard development and human rights. The UN General Assembly has made a first step by adopting Basic Principles on Sovereign Debt Restructuring Processes during the 69th session. We would like to see the General Assembly continue negotiations on an effective international debt workout mechanism during the upcoming 72nd session. These should be fully inclusive negotiations, including the European Union. We appreciate the leadership taken by the Plurinational Republic of Bolivia during their G77 presidency, and we encourage all UN Member States to replicate this great example and continue the important work of setting up an effective debt workout mechanism.”