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New report by Euro-Latin American Parliamentary Assembly calls for better debt crises resolution

Bodo Ellmers

18 Oct 2018 16:19:07

Debt problems continue to burden countries on both sides of the Atlantic. Argentina has just agreed the highest ever International Monetary Fund (IMF) loan and risk premiums for Italian bonds have surged. This is the backdrop for a new report by the Euro-Latin American Parliamentary Assembly (EuroLat – a forum that brings together 150 parliamentarians from the two regions). The report joins growing demands for better institutions to help prevent and resolve debt crises. Among the report’s recommendations, EuroLat is calling for the creation of an international debt restructuring mechanism, and a European Debt Conference to address the debt restructuring needs of a whole currency area. The EuroLat parliamentarians stress that it is their role to protect democracy and human rights – especially ...

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Annual Meetings round-up: As uncertainty reigns in the global economy, there are strong calls for a rethink of Fund and Bank policies

Maria Romero, Mark Perera, Gino Brunswijck

16 Oct 2018 15:22:45

With the country still reeling from the devastation of the Sulawesi tsunami, Indonesia played host to the Annual Meetings of the International Monetary Fund (IMF) and World Bank Group (WBG), in Bali last week. The sobriety of the moment was reflected in gloomy forecasts from the IMF, which issued stark warnings of debt and trade risks to global growth. Meanwhile, controversy surrounded the World Bank’s new Human Capital Index; the 2019 World Development Report; and the ‘private finance first’ approach at the core of the Bank’s Maximising Finance for Development. CSOs and academics raised their voices to shine a light on the risks that the policies of the Bretton Woods Institutions (BWIs) posed to human rights and sustainable development across the Global South. Eurodad presented new ...

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Financial Crisis 10 years on – How the response to the last crisis laid the foundations for the next

Bodo Ellmers

13 Sep 2018 10:12:11

This article was initially published in Eurodad member SLUG's newsletterTen years ago, on 15 September 2008, the US investment bank Lehman Brothers collapsed. This collapse is largely seen as a key event of the North Atlantic financial crisis, which also had spillover effects on the rest of the world. Around the globe, this decade-long crisis has caused massive unemployment, as well as rising poverty and inequality. It has been used and abused to slash people’s rights – in particular the rights of workers – while the financial sector that caused the crisis has benefited from huge publicly funded bailouts. Ten years after the last crisis began, global debt levels are higher than before, and debt vulnerabilities are increasingly hard to manage. That’s why activists all over the world ...

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Argentina: 20 años después, ¿realmente han cambiado los métodos del FMI?

Bodo Ellmers, Maria Romero, Gino Brunswijck

02 Aug 2018 10:33:27

This is a Spanish version of the article: Argentina: 20 years on, has the IMF really changed its ways? It has been initially published at FARN website.En julio, los argentinos experimentaron un déjà vu con los anuncios del gobierno de despidos masivos y congelamiento de salarios como parte de las medidas de ajuste ligadas a un préstamo del Fondo Monetario Internacional (FMI). Miles de funcionarios públicos se ven obligados una vez más a asumir duras medidas de austeridad. De acuerdo con el programa del FMI se introducirán medidas selectivas de asistencia social para compensar la situación. La crisis financiera que azota el país y el retorno al Fondo traen malos recuerdos a muchos argentinos que no olvidan el año 2001, en que las políticas ...

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G20 game over? Three reasons why the Finance Ministers’ meeting shows the G20’s time may be up

Jesse Griffiths, Maria Romero, Tove Ryding

24 Jul 2018 18:27:54

The G20 Finance Ministers of the world’s largest economies met in Buenos Aires last weekend, but their failure to tackle pressing global problems, including the threat of trade wars and a looming debt crisis, highlighted how ineffective the G20 has become.  Given that the G20 cannot tackle key issues, is promoting ineffective initiatives, and has largely become a rubber stamping body for other actors, the time is ripe to rethink how the global economy is governed, and to promote alternatives.1.    The G20 cannot tackle key issues The 2017 G20 showed how the ‘anti-multilateralism’ approach of the world’s major powers immediately dampened the prospects of new initiatives coming out of the G20, as Eurodad reported at the time. It is no surprise, therefore, ...

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Argentina: 20 years on, has the IMF really changed its ways?

Bodo Ellmers, Maria Romero, Gino Brunswijck

24 Jul 2018 09:44:46

This article has also been published by Triple Crisis. Argentinians are experiencing deja-vu this month as the government announces massive layoffs and a hiring freeze as part of an adjustment package attached to a loan from the International Monetary Fund (IMF). Thousands of public servants are being forced yet again to swallow the bitter pill of austerity, which the IMF programme - published last Friday - aims to patch up through increased targeted social assistance. For many Argentinians the financial crisis gripping the country, and the return to the Fund, brings back bad memories of 2001. Then, IMF-induced policies triggered the worst economic meltdown in Argentinian history. A cocktail of austerity measures contributed to the contraction of economic activity with a loss of 20 % ...

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UK Parliament questions ‘value for money’ of PPPs in highly critical report

Cecilia Gondard

28 Jun 2018 12:51:15

The committee overseeing the UK government’s expenditure has published a searing report on Private Finance Initiatives (the UK version of Public Private Partnerships - PPPs). The Public Accounts Committee raises serious concerns about the “risks to value for money for the taxpayer” and identifies shortcomings in the assessment of their benefits. The report states that “it is unacceptable that after 25 years the Treasury still has no data on benefits to show the PPP model provides value for money”. The UK Treasury, meanwhile, continues to insist that it does.  Apart from concerns about transparency, the report underlines the following shortcomings with the PPP model - many of which Eurodad have repeatedly highlighted: The specific costs associated with PPPs are a concern, including ...

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Will new rules on reporting debt relief as development aid be another missed opportunity?

Jeroen Kwakkenbos

27 Jun 2018 15:31:35

On 2 July, the Development Assistance Committee of the Organisation for Economic Co-operation and Development (OECD DAC) will decide whether to change the rules on how debt relief is reported as Official Development Assistance (ODA). There is a serious risk that these changes could create loopholes allowing donors that use debt-based instruments to inflate their aid levels at the expense of the poorest countries. Due to the switch from a cash flow basis to the Grant Equivalent (GE) system for reporting sovereign lending as ODA, the OECD DAC needs to revise the rules for how debt relief is reported. The reason behind this is that the GE system includes an ex ante adjustment for default risk, based upon country income classification: 4% for Least Developed Countries (LDCs) and other Low Income ...

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Eurozone finance ministers agree on last-minute debt reprofiling for Greece

Bodo Ellmers

26 Jun 2018 14:22:20

Eurozone finance ministers convened for a crucial Eurogroup session in Brussels on 21 June and agreed on a last-minute set of new debt reprofiling measures for Greece. The package of maturity extensions, interest deferrals and €15bn in new loans from the European Stability Mechanism (ESM) means that the Greek debt stock is likely to rise further in coming years. While Eurogroup members agreed to return profits they make on Greek bond purchases to Greece, this will happen in tranches until 2022 and comes with policy conditionalities attached. Experts doubt that the package can restore debt sustainability to Greece in the long term, and the International Monetary Fund (IMF) decided to extract itself. The case proves that an independent debt workout mechanism is urgently needed for the speedy ...

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Three uncomfortable truths – and some glimmers of hope – in the latest data on untying Official Development Assistance

Polly Meeks

18 Jun 2018 14:13:44

Last week the Organisation for Economic Cooperation and Development’s Development Assistance Committee (OECD DAC) released its 2018 report on untying Official Development Assistance (ODA). This may sound dry and technocratic, but tied ODA has life-changing – and sometimes even life-threatening – consequences for people living in poverty in the Global South. Tied ODA can only be used to buy goods and services from the country providing the ODA – putting the commercial objectives of companies in donor countries ahead of the priorities of local people. And when commercial objectives take precedence over development objectives, it’s no surprise that the end result is wasted resources; failure to meet local needs; and /or missed opportunities to support pro-poor local growth ...