G20 leaders have endorsed a plan to reduce or reschedule the debt of poorer countries hit hard by the Covid-19 pandemic.
The leaders virtually met for their 2020 summit and also agreed to extend an existing six-month program to defer the debt service payments of poor countries so that they could divert the money to fight Covid-19 and their economies to be revived by the pandemic.
The Debt Service Suspension Initiative (DSSI) initially suspended debt payments from 1 May 2020 until the end of the year. The G20 and the Paris Club have agreed to extend the debt service by another six months until 30 June 2021.
And they have decided that the G20 will decide next year whether debt service payments should be postponed for another six months until the end of 2021, depending on the assessment of the needs of the debtors. They noted that the Paris Club – of 22 government creditors – had also agreed to this possible expansion.
The G20 leaders agreed that the suspension of debt service would not be enough to help countries with deep debt, and therefore they also decided …