Debt campaigners today revealed leaked documents that show European representatives at the IMF are suggesting major modifications to last week's G8 debt deal. These could delay or even halt the debt cancellation promised to 18 countries by the G8 and maintain an IMF stranglehold over developing country economies even after they qualify for debt cancellation.

The proposal tabled by Belgian representative Willy Kiekens at the IMF in late June (after the G8 finance ministers had come up with a deal for G8 leaders to rubber stamp in Gleneagles) show that far from millions of people waking up after the G8 free of debt, countries are expected to maintain their debt payments on time and in full until the deal is formally ratified at the IMF.

Mr Kiekens represents a group of 10 countries at the IMF and holds 5.13 per cent of the votes on the Executive Board.

Even more disturbing is the suggestion that rather than agree to 100 per cent debt stock cancellation immediately, a new method of debt relief should be used for IMF debt from the countries eligible explicitly designed to maintain active interference by the IMF in national economic policy issues. The suggestion concludes ‘if the country's policies go off track for a prolonged period, it would have to serve the debt it owes to the Fund.’ Executive Directors from Switzerland, Holland and Norway signal their support in another document. Together with Belgium they collectively represent 38 countries and hold over 16 per cent of the votes at the IMF. G7 countries collectively hold 45 per cent of the votes.

This proposal has alarmed African representatives at the IMF, who felt compelled to place their concerns on record. It is also entirely counter to briefings given by UK officials indicating that the G8 deal was 100 per cent debt stock cancellation, with no ongoing conditions and no possibility of reversal.

“These proposals are in direct contradiction of what millions of campaigners and more importantly people who are poor were told by the G8,” said Stephen Rand, Co Chair, Jubilee Debt Campaign. “The response of the African delegates at the IMF will be amplified around the world by the outrage, anger and disgust at the West that this betrayal will prompt if the G8 let it happen.”

Martin Powell of the World Development Movement said “The G8 controls the IMF, and nothing can pass there without their support; if this proposal goes ahead the G8 will be responsible for the greatest political betrayal in the history of their meetings. The one redeeming feature of an otherwise woefully inadequate debt deal will have been lost.”

In the G8 nations work is underway to obtain assurances that these proposals will be resisted fully by the G8. Across Europe debt campaigners are pursuing those responsible to ensure they are aware of the disquiet and anger their proposals have engendered. Bruno Gurtner of the Swiss Coalition campaigning on debt said ‘We completely oppose the initiative supported by the Swiss ED in the IMF.’ Kjetil G. Abildsnes, Chair of the Norwegian Jubilee campaign, said ‘We never thought Norway would undermine the best part of an otherwise rotten deal by the G8.’

“We have already expressed our concerns that the 100 per cent debt cancellation deal was far from being 100 per cent,” added Stephen Rand. “These documents emphasise the need for campaigners to remain alert and active to ensure that even this small step forward is not negated, while trying to encourage all creditors to deliver 100 per cent debt cancellation of all the debts of all the countries that need debt cancellation in order to meet the poverty eradication targets agreed through the Millennium Development Goals.”

back to top >>