Local view for "http://purl.org/linkedpolitics/eu/plenary/2000-05-17-Speech-3-154"
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"en.20000517.9.3-154"2
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".
Mr President, ladies and gentlemen, first of all, with regard to poor countries’ debt, I would like to stress that the issue of partial debt relief and debt cancellation is a matter for Member States. This being so, the European Union as such is merely a marginal creditor. Nevertheless, it should be noted that the European Union has not shrunk from participating in all the initiatives to provide debt relief for the poorest countries. I would remind you that in 1996, the IMF/World Bank interim and development committees approved, at their respective annual meetings, an initiative on the debt of highly indebted poor countries, the HIPC initiative. The Community and the Member States then committed themselves to take part in this initiative by providing exceptional aid to the ACP countries on the basis of the commitment given by the international financial community to reduce the indebtedness of these countries to a sustainable level, on condition that the countries concerned would implement economic reform programmes.
In July 1998, the Council approved a decision on exceptional aid for the highly indebted ACP countries and earmarked an initial sum of EUR 40 million from the interest accumulated on European Development Fund funds.
In June 1999, at the G7 summit, the Heads of State and Government agreed to extend the HIPC initiative in order to provide more substantial and speedy debt relief. This approach was further backed by the Bretton Woods institutions at their annual meetings in September 1999.
Within the Community, at their session last December, the Council of ACP-EU Ministers decided that unallocated programmable EDF resources could be used as subsidies. This would be done in order to meet the outstanding debt and debt servicing commitments towards the Community of the first ACP countries to qualify for such a scheme under the HIPC initiative, with a total amount of EUR 320 million. These resources could also be used, up to a maximum of EUR 680 million, as a contribution to the HIPC Trust Fund managed by the World Bank, with a view to overall financing of this initiative. It is envisaged that, at the EDF Committee meeting this July, the European Commission will submit proposals for the implementation of this decision.
The European Union has also guaranteed EUR 250 million of additional constitutional funds for structural adjustment, to make it easier for eligible countries to access debt cancellation measures. Furthermore, it is worth adding that, following the resolutions I have just mentioned, and also as a result of the decisions taken at the recent Cairo Summit, various Member States have stated that they are already willing to unilaterally add their own measures for the reduction, conversion or complete cancellation of huge amounts owed by developing countries, particularly by the highly indebted poor countries.
The European Union believes that improvements to this initiative must be based on integrated programmes which link debt relief more closely to the objectives of sustainable development and the reduction of poverty. Despite these efforts by the European Union, the current problem is not so much one of increasing debt cancellation, but of ensuring that the new, enhanced HIPC initiative is effectively implemented by all donors. In order for this whole initiative not to collapse at the outset, it is crucial for the United States to bear its share of multilateral debt relief. We therefore hope that all donor countries will continue to make efforts to jointly implement the decisions that have been taken so that the greatest possible number of eligible countries can benefit. Parliament will be kept informed about these developments on a regular basis, and in particular about the progress of the decision to participate in the HIPC initiative.
With regard to your questions about monitoring the use of funds released under these initiatives, I think that the only thing we can do is to encourage the beneficiary countries to make the best use of these facilities, as we cannot guarantee, as some seem to think, that the monies provided for debt cancellation will be invested in the social sphere, and especially in health and education. I think that this rationale and this kind of intervention, no matter how well intentioned they may be, can be viewed, depending on how one chooses to interpret them, as a form of neo-colonial intervention. This is not and can never be the purpose of intervention in the internal management, and particularly the budgetary management, of these countries, either on the part of the European Union or of the Member States.
As to total debt cancellation, which some honourable Members have also suggested, it is worth remembering that the experts in this field would come up with various arguments against this option. In particular, it is highly unlikely that private banks would provide loans to these countries if they are expecting that these debts will be totally written off by public creditors. Furthermore, it is worth bearing in mind that in political terms, creating an expectation that debts will automatically be cancelled on a regular basis will inevitably reduce the credit institutions’ willingness to provide money."@en1
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