The member states of the G20 have reached an agreement on new debt service conditions to help poor countries amid the Coronavirus epidemic, and in a statement issued by the G20 the following came: “Given the scale of the Covid-19 crisis, the debt correlation with the status quo, and the deterioration of expectations in many From low-income countries, we are aware that debt service terms that go beyond the framework of the Debt Service Suspension Initiative (DSI) require arrangements for each case individually. Therefore, we endorse the general framework document for debt service outside the scope of the DSI.
“In the framework of the Spring Meetings with the International Monetary Fund and the World Bank, we will also consider whether the economic and financial situation requires an additional extension of the DSI framework (the Debt Service Payments Suspension Initiative, for another 6 months,” the statement added.
The statement also stated that all countries that were eligible to implement the initiative to suspend debt service with the conditions approved in April 2020 can still count on extending the initiative until June 30, 2021, if the debtor countries fulfill the requirements previously set. The debt repayment period, according to the new conditions, in total, reaches 6 years.
Under the new framework established, the debt restructuring process will begin in accordance with the new terms, at the request of the debtor country. This debt may include all sovereign and government guaranteed debt with an original maturity of more than one year.