EU Parliamentarians support UN initiative on Sovereign Debt Restructuring Processes

19 May 2015

UNCTAD and EURODAD jointly organised a meeting at the European Parliament in Brussels on 12 May about the work of the UN General Assembly regarding a legal framework for sovereign debt restructuring processes.

Following the September 2014 UN General Assembly Resolution 68/304 entitled "Towards the Establishment of a Multilateral Framework for Sovereign Debt Restructurings", an ad-hoc Committee was set up with the mission of elaborating this framework.

The Chairman of this committee, H.E. Ambassador Llorentty, discussed with relevant stakeholders of the European Parliament the work that has been carried out so far by the Committee. During the meeting, UNCTAD took this opportunity to present the Roadmap and Guide for Sovereign Debt Workouts.

The meeting, which gathered more than 40 participants, began with a general introduction by Bodo Ellmers from EURODAD of the challenges to be dealt with in the area of sovereign debt restructuring. He highlighted the need to reform current practices and in particular the need for: clear and predictable rules, effective institutions, faster processes and fairer outcomes placing people first.

H.E Ambassador Llorentty then described the role of the Bureau and the progress made in the General Assembly. He reinforced the idea that common principles to guide stakeholders during sovereign debt workouts are necessary.

Richard Kozul-Wright, UNCTAD, presented the Roadmap and Guide for Sovereign Debt Workouts and reminded that the current way of dealing with debt crises, which essentially consists in provoking austerity shocks, is far from being satisfying for development purposes.

EU socialist MPs from Spain, Italy, Greece, Portugal, the Netherland and Ireland actively voiced their support for the GA initiative and any other with the purpose of making current processes more legitimate and barring the activities of vulture funds.