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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 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.
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.
In 2004, the club agreed to write-off the debts of Iraq, as the rebuilding of Iraq is incomparable.[clarification needed] 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."
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.
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.
- International Monetary Fund (IMF)
- World Bank
- Organisation for Economic Co-operation and Development (OECD)
- United Nations Conference on Trade and Development (UNCTAD)
- European Commission
- African Development Bank
- Asian Development Bank
- European Bank for Reconstruction and Development (EBRD)
- Inter-American Development Bank (IADB)
List of chairpersons
- Collins Edomaruse (2011-05-23). "Jonathan Considers Anyim, Okonjo-Iweala for Cabinet". ThisDayLive. Retrieved 2011-06-08.
- CIA (2011-05-01). "Nigeria: Economy". CIA: The World Factbook. Retrieved 2011-06-08.
- "Nigeria settles Paris Club debt". BBC. 2006-04-21. Retrieved 2012-05-11.
- "Argentina still planning to repay Paris Club debt". MercoPress. 2009-11-11. Retrieved 2009-05-26.
- Drew Benson (2009-02-13). "Argentina Unlikely to Pay Back Paris Club During Global Slump". Bloomberg. Retrieved 2009-05-26.
- "Paris Club agrees to cancel Liberian debt". AFP. 2010-09-16. Retrieved 2010-09-28.
- "Myanmar clears 60% of foreign debt". Investvine.com. 2013-01-29. Retrieved 2013-01-29.
- Lex Rieffel. Restructuring Sovereign Debt: The Case for Ad Hoc Machinery. Brookings Institution Press, (2003). ISBN 081577446X