Paris Club info sent to Recaps by ScGal
I decided to do a little research on the Paris Club, since it was mentioned by both Zap and Bluedog in their recent posts. After the information, I have a couple questions for any Guru or Recaps reader who would like to comment. Thanks! SCGal
INVESTOPEDIA'S definition of 'Paris Club'
An informal group of creditor nations whose objective is to find workable solutions to payment problems faced by debtor nations. The Paris Club has 19 permanent members, including most of the western European and Scandinavian nations, the United States of America, the United Kingdom and Japan. The Paris Club stresses the informal nature of its existence and deems itself a "non-institution." As an informal group, it has no official statutes and no formal inception date, although its first meeting with a debtor nation was in 1956, with Argentina.
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I decided to do a little research on the Paris Club, since it was mentioned by both Zap and Bluedog in their recent posts. After the information, I have a couple questions for any Guru or Recaps reader who would like to comment. Thanks! SCGal
INVESTOPEDIA'S definition of 'Paris Club'
An informal group of creditor nations whose objective is to find workable solutions to payment problems faced by debtor nations. The Paris Club has 19 permanent members, including most of the western European and Scandinavian nations, the United States of America, the United Kingdom and Japan. The Paris Club stresses the informal nature of its existence and deems itself a "non-institution." As an informal group, it has no official statutes and no formal inception date, although its first meeting with a debtor nation was in 1956, with Argentina.
Read More Link on Right
INVESTODEDIA summary of the 'Paris Club'
The members of the Paris Club meet each month in the French capital, except for the months of February and August. These monthly meetings may also include negotiations with one or more debtor countries that have met the Club's pre-conditions for debt negotiation. The main conditions a debtor nation has to meet are that it should have a demonstrated need for debt relief and should be committed to implementing economic reform, which in effect means that it must already have a current program with the International Monetary Fund (IMF) supported by a conditional arrangement.
The Paris Club has five key functioning principles: case by case, consensus, conditionality, solidarity and comparability of treatment.
WIKIPEDIA INFO:
The Paris Club (French: Club de Paris) is an informal group of financial officials from 19 of some of the world's biggest economies, which provides financial services such as, debt restructuring, debt relief, and debt cancellation to indebted countries and their creditors.
Debtors are often recommended by the International Monetary Fund after alternative solutions have failed.
It meets every six weeks (note that Investopedia said every month) at the French Ministry of Economy and Finance in Paris. It is chaired by a senior official of the French Treasury, currently the Director General of the Treasury [Ramon Fernandez].
The club grew out of crisis talks held in Paris in 1956 between the nation of Argentina and its various creditors. Its principles and procedures were codified at the end of the 1970s in the context of the North-South Dialogue.
1990s Activities
In the 1990s, the club began to treat the HIPC (Heavily-Indebted Poor Countries) and non-HIPCs differently. The club began to grant increasingly larger debt reductions for the HIPCs. For the non-HIPCs, the club engaged less in debt reductions and moved towards encouraging the absorption of non-HIPCs' financial losses by bondholders and other private creditors. (So -- what we saw in Cyprus is NOT new nor are the ideas that the EU and other bond holders should absorb some of the debts Greece, Spain, Portugal, Italy, etc.)
2000s DEBTS FORGIVEN
IN 2004, THE CLUB AGREED TO WRITE-OFF THE DEBTS OF IRAQ, AS THE REBUILDING OF IRAQ IS INCOMPARABLE.
After the 2004 Indian Ocean earthquake, the Paris Club decided to suspend temporarily some of the repayment obligations of the affected countries.
In November 2005, during the tenure of Dr. Ngozi Okonjo-Iweala as Nigeria's Minister of Finance, the Nigerian government "won Paris Club approval for a debt-relief deal that eliminated $18 billion of debt in exchange for $12 billion in payments ...". This discharged "...$30 billion of Nigeria's total $37 billion external debt."
In April 2006, Nigeria became the first African country to fully pay off its debt (estimated $30 billion) owed to the Paris Club.
On September 2, 2008, President Cristina Fernández de Kirchner of Argentina announced plans to pay off the entirety of debt owed to the Paris Club, which amounted to roughly $6.7 billion. Political pressures ensued and though the government officially insists its intention to repay, government officials have stated that this is unlikely until global credit conditions improve.
2010s DEBTS FORGIVEN
On September 16, 2010, the Paris Club canceled $1.26 billion of Liberia's debt, 100% of the Paris Club's share of a World Bank-IMF poverty reduction program.
On November 18, 2010, the Paris Club canceled $7.35 billion of Democratic Republic of the Congo's debt. This resulted in the removal of over 50% of their debt.
On November 16, 2012, the Paris Club canceled $6.5 billion of Ivory Coast's debt, all of their debt to the Paris Club.
On January 28, 2013, Myanmar has announced deals with international lenders including Paris Club member nations to cancel or refinance nearly $6 billion of its debt, Paris Club's share to be written off US$ 2.2 billion.
PERMANENT MEMBERS
Australia Austria Belgium Canada
Denmark Finland France Germany
Ireland Italy Japan Netherlands
Norway Russia Spain Sweden
Switzerland United Kingdom United States
ASSOCIATED MEMBERS
Abu Dhabi Argentina Brazil Israel
Kuwait Mexico Morocco
New Zealand Portugal South Africa
South Korea Trinidad and Tobago Turkey
OBSERVERS
--International Monetary Fund (IMF)
--World Bank
--Organisation for Economic Co-operation and Development (OECD)
--European Commission
--United Nations Conference on Trade and Development (UNCTAD)
Q: If in 2004 ALL Iraqi debts were forgiven by these member countries, then how can the USA still have oil credits for repayment of the war?
Q: Notice who is not on the member or associate member list? CHINA.
Is this why China can buy the oil credits from the USA and then China can make Iraq honor these oil credits, since it would appear China has not forgiven any Iraqi debts? So is this an indirect way for the USA to not honor the Paris Club agreement made in 2004 and instead make money on what we have said is forgiven debts?
The members of the Paris Club meet each month in the French capital, except for the months of February and August. These monthly meetings may also include negotiations with one or more debtor countries that have met the Club's pre-conditions for debt negotiation. The main conditions a debtor nation has to meet are that it should have a demonstrated need for debt relief and should be committed to implementing economic reform, which in effect means that it must already have a current program with the International Monetary Fund (IMF) supported by a conditional arrangement.
The Paris Club has five key functioning principles: case by case, consensus, conditionality, solidarity and comparability of treatment.
WIKIPEDIA INFO:
The Paris Club (French: Club de Paris) is an informal group of financial officials from 19 of some of the world's biggest economies, which provides financial services such as, debt restructuring, debt relief, and debt cancellation to indebted countries and their creditors.
Debtors are often recommended by the International Monetary Fund after alternative solutions have failed.
It meets every six weeks (note that Investopedia said every month) at the French Ministry of Economy and Finance in Paris. It is chaired by a senior official of the French Treasury, currently the Director General of the Treasury [Ramon Fernandez].
The club grew out of crisis talks held in Paris in 1956 between the nation of Argentina and its various creditors. Its principles and procedures were codified at the end of the 1970s in the context of the North-South Dialogue.
1990s Activities
In the 1990s, the club began to treat the HIPC (Heavily-Indebted Poor Countries) and non-HIPCs differently. The club began to grant increasingly larger debt reductions for the HIPCs. For the non-HIPCs, the club engaged less in debt reductions and moved towards encouraging the absorption of non-HIPCs' financial losses by bondholders and other private creditors. (So -- what we saw in Cyprus is NOT new nor are the ideas that the EU and other bond holders should absorb some of the debts Greece, Spain, Portugal, Italy, etc.)
2000s DEBTS FORGIVEN
IN 2004, THE CLUB AGREED TO WRITE-OFF THE DEBTS OF IRAQ, AS THE REBUILDING OF IRAQ IS INCOMPARABLE.
After the 2004 Indian Ocean earthquake, the Paris Club decided to suspend temporarily some of the repayment obligations of the affected countries.
In November 2005, during the tenure of Dr. Ngozi Okonjo-Iweala as Nigeria's Minister of Finance, the Nigerian government "won Paris Club approval for a debt-relief deal that eliminated $18 billion of debt in exchange for $12 billion in payments ...". This discharged "...$30 billion of Nigeria's total $37 billion external debt."
In April 2006, Nigeria became the first African country to fully pay off its debt (estimated $30 billion) owed to the Paris Club.
On September 2, 2008, President Cristina Fernández de Kirchner of Argentina announced plans to pay off the entirety of debt owed to the Paris Club, which amounted to roughly $6.7 billion. Political pressures ensued and though the government officially insists its intention to repay, government officials have stated that this is unlikely until global credit conditions improve.
2010s DEBTS FORGIVEN
On September 16, 2010, the Paris Club canceled $1.26 billion of Liberia's debt, 100% of the Paris Club's share of a World Bank-IMF poverty reduction program.
On November 18, 2010, the Paris Club canceled $7.35 billion of Democratic Republic of the Congo's debt. This resulted in the removal of over 50% of their debt.
On November 16, 2012, the Paris Club canceled $6.5 billion of Ivory Coast's debt, all of their debt to the Paris Club.
On January 28, 2013, Myanmar has announced deals with international lenders including Paris Club member nations to cancel or refinance nearly $6 billion of its debt, Paris Club's share to be written off US$ 2.2 billion.
PERMANENT MEMBERS
Australia Austria Belgium Canada
Denmark Finland France Germany
Ireland Italy Japan Netherlands
Norway Russia Spain Sweden
Switzerland United Kingdom United States
ASSOCIATED MEMBERS
Abu Dhabi Argentina Brazil Israel
Kuwait Mexico Morocco
New Zealand Portugal South Africa
South Korea Trinidad and Tobago Turkey
OBSERVERS
--International Monetary Fund (IMF)
--World Bank
--Organisation for Economic Co-operation and Development (OECD)
--European Commission
--United Nations Conference on Trade and Development (UNCTAD)
Q: If in 2004 ALL Iraqi debts were forgiven by these member countries, then how can the USA still have oil credits for repayment of the war?
Q: Notice who is not on the member or associate member list? CHINA.
Is this why China can buy the oil credits from the USA and then China can make Iraq honor these oil credits, since it would appear China has not forgiven any Iraqi debts? So is this an indirect way for the USA to not honor the Paris Club agreement made in 2004 and instead make money on what we have said is forgiven debts?
via Dinar Recaps - Our Blog http://www.dinarrecaps.com/1/post/2014/01/paris-club-info-sent-to-recaps-by-scgal.html
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