Germany pledges 3 billion euros for poor countries

BERLIN: Germany pledged 3 billion euros ($3.4 billion) at a meeting of G20 finance ministers to help the world’s poorest countries, the finance ministry said on Saturday.

The funds will be made available as long-term loans for the International Monetary Fund’s Poverty Reduction and Growth Trust (PRGT).

In April, IMF officials said they had received pledges of a combined $11.7 billion from Australia, Japan, Canada, France and Britain to replenish the PRGT. The United States has not yet pledged any money for the programme.

“With the funds … low-income countries can receive greatly discounted loans and bridge liquidity bottlenecks,” the German finance ministry said.

It added that Germany will provide a total of 8.7 billion euros for international aid measures in 2020 and 2021.

‘Reducing debts of poorest countries’

World Bank President David Malpass urged the G20 to extend a freeze in official debt payments by the poorest countries through the end of 2021, and said they should start talks on reducing the debt of some countries.

Malpass was of the view that some major official creditors were not participating fully in the Debt Service Suspension Initiative (DSSI), and private creditors should stop collecting payments from the poorest countries.

“Even with these immediate steps … many of the poorest countries won’t be able to make the resulting debt burdens sustainable in the medium term,” he said. “I urge the G20 to open the door to consultations about the debt overhang itself and effective ways to reduce the net present value of both official bilateral and commercial debt for the poorest countries.”