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Catholic agencies urge G20 countries to grant debt relief during pandemic

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A multitude of Catholic organizations are renewing their calls for rich countries to cancel their debt and offer financial support to developing countries as they battle massive indebtedness during the Covid-19 pandemic.

By Lisa Zengarini

Catholic social justice organizations have renewed their call for debt cancellation and financial support for poorer countries in light of the current Covid-19 crisis.

In a statement released ahead of the meeting of G-20 finance ministers and central bank governors, which took place in a virtual format on Friday, the Catholic International Network for Development and Solidarity (CIDSE) urged key economies of the world to respond to the crisis with cooperation and solidarity.

They underlined the words of Pope Francis that “the debts that have been incurred cannot be expected to be paid at the cost of unbearable sacrifices”.

Breaking point

CIDSE notes that “in addition to the tragic loss of life, Covid-19 has extended health systems in many poor countries beyond the breaking point, left millions of people without jobs or livelihoods, and decimated savings ”.

According to the Catholic network, the crisis has exacerbated existing inequalities “whereby more powerful countries can use their position and power to ensure access to vaccines and support their own economic recovery”. It also “aggravated the challenges for many countries that were grappling with the impacts of climate change.”

The organizations stressed that “the immediate priority for all countries is to save lives and support livelihoods, and debt cancellation is the fastest way to finance this.” They added that in the long run, “permanent debt restructuring and new financing are needed to rebuild societies and economies that put the needs of the poorest and most vulnerable first, take care of our homes. community and fight against the climate crisis “.

“We must act in global solidarity as one human family, moving from a myopic view of what is politically, financially and technically feasible, to focusing on what is needed to save lives and protect our planet for them. current and future generations, ”they say. .

Looking for a permanent solution

CIDSE therefore urges the G-20 to act immediately, namely “to support a new and significant issue of $ 3 trillion of special drawing rights (SDRs) by the IMF, which will allow all countries to respond to the crisis. of Covid and to support a fair, sustainable recovery “and” to extend the debt moratorium through the DSSI (Debt Service Suspension Initiative) for longer (at least 4 years) and to more countries, including climate-vulnerable countries that were already struggling to respond to the additional pressures of climate change. “

The Catholic network is also asking that private creditors – who currently continue to take debt payments from countries struggling to meet the needs of their citizens – be “forced to participate in all restructuring and debt relief.”

Finally, CIDSE calls for “a permanent debt settlement mechanism to ensure swift, comprehensive and equitable debt restructuring to all countries with high and unsustainable debt burdens, without conditionality.”