G8 agrees debt cancellation for poorest nations

13th June 2005, Comments 0 comments

13 June 2005, LONDON - Finance ministers of the seven leading industrial nations and Russia agreed on Saturday to cancel the debts of the world's 18 poorest countries in a move described by German finance minister Hans Eichel as a "historic decision".

13 June 2005

LONDON - Finance ministers of the seven leading industrial nations and Russia agreed on Saturday to cancel the debts of the world's 18 poorest countries in a move described by German finance minister Hans Eichel as a "historic decision".

British chancellor Gordon Brown said after a two-day meeting of G8 ministers in London that USD 40 billion (EUR 33.2 billion) in debt is to be cancelled immediately for the world's poorest 18 countries.

In total, USD 55 billion (EUR 45.7 billion) owed by 38 countries is expected to be written off over the next 12 to 18 months.

The deal, which has to be approved by the World Bank and International Monetary Fund, would free revenue for spending on health, education and development, he said.

German finance minister Hans Eichel described the decision to cancel 100 percent of the poorest 18 countries' debt as a "historic decision".

The agreement comes a month before a G8 summit at Gleneagles, Scotland, at which Britain has vowed to make poverty reduction a priority.

The British chancellor said discussion had also centred on world trade and claimed ministers acknowledged changes were needed to allow poorer countries to compete.

"We are moving closer to achieving greater trade justice for the world as we move towards Gleneagles," said Brown.

Saturday's agreement also follows confirmation from Washington that Britain and the US had agreed on how to implement debt cuts.

A total of 38 impoverished countries in all, mostly located in sub-Saharan Africa, would benefit from the debt cancellation. The debts are owed to the International Monetary Fund, World Bank and African Development Fund.

The G8 nations include the US, Britain, France, Canada, Italy, Japan, Russia and Germany.

Brown said ministers had also discussed new efforts to tackle AIDS, and would attempt to ensure "universal access" to AIDS treatment by 2010.

He said that they would promote more international research on treatment, and intend to have a report on development of new approaches completed by the end of the year.

DPA

Subject: German news

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