The “Paris club” has existed since 1956, but it remains very little known. This informal group of 22 creditors-Germany, Australia, Australia, Belgium, Brazil, Canada, South Korea, Denmark, Spain, United States, Finland, France, Ireland, Israel, Italy, Japan, Norway, Netherlands, United Kingdom, Russia, Sweden and Switzerland-, to which South Africa must be added, prospective member since July 8, 2022 The resolution of problems related to the reimbursement of sovereign debts by borrowing countries.
Since its creation, “Nearly 500 debt treatments [ont été réalisés] With more than 100 borrowing countries, for a debt stock of more than $ 600 billion ”, Details the annual report of the “Paris club” unveiled on Wednesday June 25.
Today, the 22 countries (as well as South Africa) have $ 322.3 billion in claims, excluding delay interests. And this, with states to the very different economic situation: from Albania ($ 868 million in debt) to Chile (44 million), from Senegal (2.5 billion) to the Maldives (48 million).
“Most countries have a very low probability of requesting debt treatment, based on their current macroeconomic perspectives”, specifies the report.
Under the eye of the IMF
Concretely, the 22 states of the group do not end up negotiations to restructure the debt of a country in difficulty only on the condition that it is engaged in a program with the International Monetary Fund (IMF). Besides, “Representatives of the IMF and the Banque de France participate in the meetings of the” Paris club “as observers”.
This is how on January 12, 2024, Ghana was able to sign an agreement which enabled it to re-enter its debt due over the period 2023-2026. That Somalia also reached an agreement with the group of 22 to cancel a large part of its debt “As part of the” very indebted country “initiative,” According to the report. Like Zambia or Sri Lanka which managed to complete agreements last year to lighten the burden of their debts.
This long and technical work on sovereign debts is done under the aegis of a senior French official: Bertrand Dumont. At the head of the Directorate General of the Treasury since January 12, 2024, he is officially president of the “Paris club”.
One meeting per month
Around him, the members meet each month to identify countries in difficulty. All by applying six fundamental principles: solidarity between creditors, consensus in decision -making, information sharing, decision -making decision, conditionality (restructuring of a debt is under conditions) and comparability of processing between creditors.
“Debt represents a major issue for all sovereign countries, regardless of their size or economy”, underlined the Minister of the Economy, Éric Lombard, in conclusion of the “Paris Forum”, an annual raout of the members of the group held in Bercy on Wednesday.
There is no doubt that the tenant of Bercy thought of France by pronouncing these words. And for good reason … INSEE announced this Thursday, June 26, that the tricolor debt reached the record sum of 3,305.3 billion euros at the end of the first quarter of 2025 (114 % of GDP). A budgetary situation that is so worrying that it pushes the government of François Bayrou has without delay an additional budgetary effort of 5 billion euros this year. The objective is to maintain the public deficit at 5.4 % of GDP in 2025.
