Search

 

Cablegate: January 2010 Paris Club Meeting

VZCZCXRO4876
RR RUEHBZ
DE RUEHC #3489/01 0471743
ZNR UUUUU ZZH
R 161737Z FEB 10
FM SECSTATE WASHDC
TO RUEHFR/AMEMBASSY PARIS 8366
INFO RUEHBY/AMEMBASSY CANBERRA 6424
RUEHVI/AMEMBASSY VIENNA 0740
RUEHBS/AMEMBASSY BRUSSELS 6304
RUEHOT/AMEMBASSY OTTAWA 1366
RUEHCP/AMEMBASSY COPENHAGEN 1743
RUEHHE/AMEMBASSY HELSINKI 2907
RUEHRL/AMEMBASSY BERLIN 6216
RUEHDL/AMEMBASSY DUBLIN 1532
RUEHRO/AMEMBASSY ROME 4064
RUEHKO/AMEMBASSY TOKYO 2216
RUEHTC/AMEMBASSY THE HAGUE 7695
RUEHNY/AMEMBASSY OSLO 0062
RUEHMO/AMEMBASSY MOSCOW 7268
RUEHMD/AMEMBASSY MADRID 3890
RUEHSM/AMEMBASSY STOCKHOLM 8978
RUEHSW/AMEMBASSY BERN 7401
RUEHLO/AMEMBASSY LONDON 9235
RUEHBUL/AMEMBASSY KABUL 6102
RUEHWN/AMEMBASSY BRIDGETOWN 0409
RUEHAN/AMEMBASSY ANTANANARIVO 0042
RUEHBZ/AMEMBASSY BRAZZAVILLE 1880
RUEHBU/AMEMBASSY BUENOS AIRES 0661
RUEHKI/AMEMBASSY KINSHASA 0135
RUEHRY/AMEMBASSY CONAKRY 3541
RUEHDJ/AMEMBASSY DJIBOUTI 1734
RUEHAD/AMEMBASSY ABU DHABI 0519
RUEHPU/AMEMBASSY PORT AU PRINCE 0798
RUEHRK/AMEMBASSY REYKJAVIK 0053
RUEHMV/AMEMBASSY MONROVIA 0060
RUEHNK/AMEMBASSY NOUAKCHOTT 2559
RUEHKH/AMEMBASSY KHARTOUM 0159
RUEHKV/AMEMBASSY KYIV 3315
RUEHGV/USMISSION GENEVA 0302
RUEHUB/USINT HAVANA 7663
RUEKJCS/SECDEF WASHINGTON DC
RUEPTRS/TREASURY DEPT WASHINGTON DC 0634

UNCLAS SECTION 01 OF 12 STATE 013489

SENSITIVE
SIPDIS
TRESURY FOR DO/IDD AND OUSED/IMF
SECDEF FOR USDP/DSCA
EXIM PASS TO CLAIMS - MPAREDES
USDA PASS TO CCC - WWILLER/JDOSTER
USAID PASS TO CLAIMS - WFULLER
DOD PASS TO DSCS - PBERG

E.O. 12958: N/A
TAGS: EFIN ECON EAID XM XA XH XB SF FR
SUBJECT: January 2010 Paris Club Meeting

1. (SBU) Summary: During the January 2010 Paris Club Tour d'Horizon,
creditors discussed Afghanistan, Antigua and Barbuda, Argentina,
Democratic Republic of Congo, Congo-Brazzaville, Cte d'Ivoire, Cuba,
Djibouti, Dubai/UAE, Grenada, Guinea, Guinea -Bissau, Haiti, Liberia,
Mauritania, Seychelles and Ukraine. Iceland was discussed over
lunch. Methodological issues included outreach efforts, UNCTAD's
initiative on responsible borrowing and lending, and the Club's
annual report. Following the tour, there was a meeting of the
working group on non-indemnified credit guarantees.

2. (SBU) The Club issued a press release highlighting the 100 percent
debt forgiveness provided to Haiti, and urged other bilateral
creditors to do the same. The Club is preparing for negotiations
with the Democratic Republic of Congo (DRC) on February 24. The U.S.
noted strong human rights concerns and relevant legislation but said
it was cautiously confident it would be able to provide treatment.
Negotiations with Congo-Brazzaville and Afghanistan are scheduled for
March, with both countries reaching their "completion point" under
the Heavily Indebted Poor Countries (HIPC) initiative. End Summary.

-----------
Afghanistan
-----------

3. (SBU) The International Monetary Fund (IMF) reported that despite
the security situation, economic performance had been satisfactory.
GDP was expected to grow 15% in FY2009-10, with inflation of 6%.
Revenue collection had improved, and non-security spending was below
the program ceiling. The sixth review of the program under the
Poverty Reduction and Growth Facility (PRGF) had been completed in
January and the program extended to June, and the GoA and IMF would
discuss a successor program.

4. (SBU) Afghanistan reached completion point on January 25, with
waivers requested on triggers relating to pension reform and
restructuring ministries. Based on the IMF's latest calculations,
the amount of debt eligible for HIPC treatment was raised by $11
million, to $1.131 billion (in NPV terms), with "required assistance"
of $582 million. (NOTE: This amount refers to the level of HIPC debt
relief required in March 2010, in 2006 NPV terms, to bring
Afghanistan's debt-to-exports ratio down to an acceptable level as
agreed under the HIPC initiative. Given the increase in eligible
debt, the level of required assistance was revised upward from the
$571.4 million estimated at decision point to $582.4 million. In
nominal terms the required assistance is estimated at $1.3 billion,
of which $225.3 million would be delivered by multilateral creditors

STATE 00013489 002 OF 012


and the remainder by bilateral and commercial creditors. In practice,
the official bilateral creditors are expected to go beyond this level
of required assistance and cancel 100 percent of their claims on
Afghanistan. End Note) Even with this level of debt relief, the IMF
rep said the future remained highly uncertain and the country
remained at high risk of debt distress, largely due to remaining
multilateral debt. Completion point negotiations with the Club are
expected to take place in March. [Note: In a hallway conversation,
the Russian delegate indicated that he did not anticipate any
obstacles with the negotiations. End Note.]

-------------------
Antigua and Barbuda
-------------------

5. (SBU) The IMF reported that Antigua had been hard-hit by declines
in tourism, foreign direct investment (FDI), and remittances. Fiscal
revenues had fallen by 10% in 2009, and were expected to decline a
further 2% in 2010. There was a mounting banking crisis, driven in
part by the Stanford and Trinidad Group collapses. Program
discussions had not been proceeding as rapidly as had been hoped, but
the 2010 budget was a positive step, incorporating a shift to a
primary surplus, cuts in transfers, widening of the VAT base and
adjustments in import duties. A March mission would discuss the
budget and further steps, with the hope of finalizing SBA
negotiations for an April Board consideration. External and domestic
debt restructuring would be "critically needed." Antigua had engaged
advisors and was considering options, including on arrears.

6. (SBU) The Secretariat agreed that the high level of arrears would
need to be addressed in negotiations, and raised the prospect of
financing assurances being requested at the Club's March meeting. It
noted that the nature of the treatment was open, with sustainability
an important consideration. On the margins, USdel reconfirmed that
the U.S. lacked authority or funding to go beyond a rescheduling of
Antigua's debt.

---------
Argentina
---------

7. (SBU) The IMF reported that the recent crisis regarding the
establishment of a payment account in the central bank and central
bank independence had caused asset prices to fall, but was not likely
to have much impact on the real economy, although investment could
suffer if it lingered. Argentina was trying to regain market access
through its new offer to holdout creditors, though its launch would
be delayed by the central bank dispute. The offer, on about $20
billion of debt, would be a 66% haircut, with full payment of about
$10 billion in past due interest. The offer would also make up past

STATE 00013489 003 OF 012


warrants, and would come in the form of a new 7-year bond, at market
rates. Institutional creditors would have to put in new money. There
had been no progress between the Authorities and the Fund on an
Article IV.

8. (SBU) Canada asked whether the Secretariat had received a response
to its October letter to Brazil, chastising that government for
providing new financing to an Argentine state-owned airline. The
Secretariat confirmed that none had been received; the letter was
later mentioned in the presence of the Brazilian delegation, which
did not comment.

-----------------
Congo-Brazzaville
-----------------

9. (SBU) The IMF reported that Congo-B's performance had been
satisfactory, that it had fully met all of its HIPC triggers,
including all required decisions, measures and implementation, and
that Board approvals of completion point were scheduled for January
26 and 27. [Note: These did occur.] The economic outlook was
positive, due to rising oil production and the recovery of the global
economy.

10. (SBU) The IMF noted that HIPC assistance would total $1.6
billion, with $178 million (nominal) in additional relief from the
multilateral debt relief initiative (MDRI), mostly from IDA. The
Bank reported that the government had approached its remaining
private sector creditors, mainly trade creditors, and had requested
Bank support, including possibly from IDA's Debt Reduction Facility.
The Bank was examining the request, and was discussing technical
assistance on debt management. The Club agreed to invite the
authorities for completion point negotiations in March.

-------------
Cte d'Ivoire
-------------

11. (SBU) The IMF reported that CDI had been little affected by the
crisis in large part due to good harvests and high cocoa and oil
prices, which helped GDP to grow 3.7% in 2009. Structural progress
was slow, in part because of elections. The first review of the
program had taken place on November 18; a mission for the second was
planned for mid-February, but it was unclear when the review would be
completed due to the elections. The Fund rep said it was possible
CDI could reach HIPC completion point in a year's time. Creditors
discussed whether the Club should insist on CDI's seeking comparable
treatment from the Sphinx group of private creditors that had
provided funding when all other sources declined. The Secretariat
said fully comparable treatment was unlikely. It was left that the

STATE 00013489 004 OF 012


Secretariat would contact the government informally; while
reiterating Club principles, the Secretariat would express
understanding for the CDI's difficulties in dealing with these
creditors.

----
Cuba
----

12. (SBU) At November's meeting, Australia had raised the possibility
of its canceling its debts to Cuba outside the Club; the response had
been overwhelmingly negative. In view of this, Australia's foreign
minister suggested during a November visit that Cuba consider
approaching the Club. Cuba replied that it was not interested. The
Secretariat reported that it too had been in touch with Cuban
authorities, and had received the same response.

----------------------------
Democratic Republic of Congo
----------------------------

13. (SBU) The IMF reported on the December 11 Board approval of DRC's
Extended Credit Facility (ECF) program, following the Club's
provision of financing assurances. The program provided for $550
million in access, and interim HIPC relief of $73 million for the
year. The Fund's preliminary view was that performance (the program
began in July, despite the December Board approval) had been
satisfactory. The program's 2009 fiscal targets had been achieved,
with better-than-targeted revenues outpacing spending overruns that
were driven by humanitarian and security needs.

14. (SBU) A mission was planned for the first half of March to review
the ECF and examine progress on HIPC triggers. Data reconciliation
would take place later this quarter, with a view towards completion
point in June, probably alongside the first review of the program.
The Bank concurred with the June date, although a strong effort on
triggers would be required. Of particular concern was the trigger on
procurement, since Parliament needed to approve the code (which had
been ready for a month), which then required three months of
implementation.

15. (SBU) The Secretariat then turned to the upcoming negotiations,
scheduled for February 24. The U.S. noted that it was analyzing the
poor human rights situation in DRC to determine whether the country
met the U.S. legislative conditions for debt relief. The delegation
noted that it was "cautiously confident" that DRC's situation would
not meet the stringent test specified in the legislation so that the
U.S. would be able to provide treatment, but that a decision had not
yet been reached. There was remarkably little response. Over lunch,
the IMF rep expressed hope that the U.S. would at least be able to

STATE 00013489 005 OF 012


join the treatment of arrears - otherwise, financing of the Fund
program was in doubt. Creditors discussed but did not reach
agreement on whether to cancel arrears, as would be normal for this
interim HIPC treatment, or reschedule them, as several creditors
favored as a further incentive to reach completion point. USdel
expressed support for rescheduling arrears.

--------
Djibouti
--------

16. (SBU) Club negotiations with Djibouti in October 2008 were very
contentious, in large part because of the authorities' last-minute
attempts to exclude certain debts. The authorities were still trying
to achieve this by not concluding bilateral agreements, and the
Secretariat drafted a letter expressing annoyance at this and
indicated that the failure to conclude bilaterals and consequent
arrears to the Club, along with the failure to complete the second
program review, meant that the conditions for the second phase of the
treatment had not been met. Belgium and Italy, which had only ODA
credits, both reported that bilaterals had been signed, but the three
creditors with commercial debt - Spain, Germany, and France - all
reported that Djibouti was refusing to sign the commercial terms.
The Secretariat indicated that creditors could bill Djibouti, based
on original payment schedules and that any payments could then be
reimbursed if and when the phase was implemented.

-----
Dubai
-----

17. (SBU) The IMF reported on recent developments, including the
effects of lower oil prices and the global recession, the burst of
the property bubble, Dubai's attempts to boost demand with
infrastructure investments, and Dubai World's announcement that $26
billion of debt would need to be restructured. $4.1 billion of the
$10 billion bailout from Abu Dhabi had been used to pay the Nakheel
Islamic bond, but many issues remained.

18. (SBU) There was still a lack of information on Dubai World and on
its attempts to restructure the remaining $22 billion. There were
some indications of attempts to increase transparency and strengthen
corporate governance, and there was better cooperation both among the
emirates and between them and the UAE government. Abu Dhabi sought
to maintain stability but discourage moral hazard; it continued to
support Dubai World but said it was not legally liable for Dubai's
debts. There was some concern about the new insolvency decree for
Dubai World, which fell under several legal frameworks in the UAE.
Some creditors felt that it removed their other means of recourse.


STATE 00013489 006 OF 012


-------
Grenada
-------

19. (SBU) The IMF reported that Grenada had been hard-hit by the
crisis. The collapse of the Trinidad Group had seriously impacted
financial system stability. There was a strong commitment to the
ECF, however; the fourth review was completed in November, along with
an Article IV. The government was controlling capital spending and
had met all June quantitative targets, and the Fund's preliminary
view was that it had met all year-end quantitative targets as well.
The centerpiece of the program - introduction of a VAT by February -
appeared to be on track. Other structural steps taken include a new
investment act, enhanced supervision of nonbank financial
institutions, and a PRSP, due by mid-2010.

20. (SBU) Nevertheless, the near term was challenging. The debt/GDP
ratio had risen by 14 percentage points in 2009 to 116%, after having
fallen in each of the two previous years. The country was
consequently at high risk of debt distress, the economy was expected
to contract further in 2010, there was no fiscal space and the local
currency board meant there was little space for any sort of
countercyclical policy. The country faced an external gap for
2010-13, and the government had requested a successor ECF. Fund
financing alone would be insufficient, however, so Grenada intended
to approach the Club for Evian Terms treatment. [Note - the USG
would be able to participate in a classic rescheduling, but not to
provide debt reduction.]

21. (SBU) There is some animosity towards Grenada in the Club, due in
large part to its failure to seek comparable treatment from Kuwait
and its claim that this was not required by the Club, an issue that
dragged on for much of 2009. Belgium complained that after the last
extension had been granted, Grenada had taken the liberty of
considering the extended payments to be short term, paying interest
but not principal.

22. (SBU) The Secretariat also raised a proposed loan from China -
equivalent to 17% of GDP - for construction of a luxury hotel. The
Fund replied that it would emphasize to the authorities that the loan
could impact various programs, including availability of concessional
resources and Paris Club treatment, and that it would urge the
authorities that at a minimum the loan should be concessional.

------
Guinea
------

23. (SBU) Guinea had been on the verge of completion point at the
time of the December 2008 coup. It was on the Club's agenda because

STATE 00013489 007 OF 012


of recent political developments, particularly the January 15
agreement between political factions, and to discuss the second phase
of the country's decision point treatment, which had never entered
into force. After surveying members, IMF management had determined
in September 2009 that there was no government in Guinea with which
the Fund could engage. Consequently, the flow of information had
dried up.

24. (SBU) The Secretariat noted that the beginning of the second
phase was a year overdue, and recalled its May 2009 letter to the
authorities that had informed them that they should resume making
payments according to the original schedules. Creditors discussed
whether to send a second letter, informing the country that the
second stage had been cancelled. They agreed that such a letter at
the current juncture could be misinterpreted as a negative signal
regarding the political developments, which were generally seen as
encouraging. They therefore agreed that no letter would be sent,
though the Secretariat could have some informal contact with
authorities.

--------------
Guinea -Bissau
--------------

25. (SBU) The IMF reminded creditors that Guinea-Bissau had reached
decision point in December 2000, and then had quickly gone off-track.
Arrears had been accumulating since then; total debt at the end of
2008 was approximately $1.04 billion, 246% of GDP - in NPV terms,
171% of GDP and 573% of exports. Arrears accounted for more than a
third of the stock, $384 million. The country, not surprisingly, was
in debt distress. The government needed to limit spending to
available resources, protect priority spending, and address domestic
arrears. A mission was in the country to conduct an Article IV
review and discuss an ECF, which could pave the way for completion
point. If the ECF were approved in the first half of the year,
completion point could conceivably be reached by year-end. (The USG
is not a creditor.)

-----
Haiti
-----

26. (SBU) The Club's January 19 press release noted that the Club had
provided 100% debt cancellation, and called on the remaining
bilateral creditors to do the same. The Secretariat had also
attempted to contact those two creditors, Taiwan and Venezuela. It
failed to make contact with Venezuela, whose finance minister had
taken office the previous week, but the Taiwanese said they were "not
closed" to the idea, though it raised political issues and would
require legislation. The Fund and Bank both pointed to the $100

STATE 00013489 008 OF 012


million in additional financing they had each announced, additional
access under the PRGF/ECF and additional grants from IDA
respectively. The IMF representative noted that the Fund was not
considering other measures, since there was no framework for doing
so, the interest rate Haiti faced was zero, and debt service payments
were negligible.

-------
Iceland
-------

27. (SBU) Iceland was not on the agenda, but the Netherlands and UK
briefed creditors over lunch, in view of the Icelandic President's
decision not to sign the Icesave legislation implementing the
agreement among the governments. As expected, they argued that
Iceland was obligated to repay the entire amount of deposit
guarantees, including interest. The two countries argued that the
terms agreed with Iceland were generous, with fixed rates of 5.55%,
fifteen year period with seven of grace, no breakage charges, and a
goodwill clause allowing renegotiation if the Fund finds a
significant deterioration of Iceland's debt sustainability. The UK
and Dutch deflected a question as to what they would do if the
agreement was rejected in the planned referendum.

-------
Liberia
-------

28. (SBU) The IMF reported that implementation of the three-year ECF
approved in March 2008 remained satisfactory, with good progress on
both structural and macro conditions. A waiver had been needed for a
June 2009 revenue shortfall, but this had been addressed. The third
review was competed in December and a fourth was expected in June
2010. Progress on HIPC completion point triggers was significant,
and completion point could accompany the fourth review.

----------
Mauritania
----------

29. (SBU) The IMF requested that Mauritania be placed on the agenda,
even though it is a post-completion point HIPC. The Fund noted that
the August 2008 coup had caused a suspension of the PRGF program, and
led many donors to discontinue aid. The 2009 elections brought a
resumption of normality. The macroeconomic situation deteriorated
sharply due to the political crisis, global situation, and declines
in prices of exports. The PRGF program was cancelled, and the
authorities had requested an ECF. There was agreement on the terms
of the program covering 2010-12, which could go to the Board in
March. Goals would include a resumption of growth to about 5% a

STATE 00013489 009 OF 012


year, bolstering reserves, improving the tax and financial systems,
and other changes.

----------
Seychelles
----------

30. (SBU) The IMF reported that the Board approved the third review
under the Standby Arrangement and a $30 million (225% of quota)
Extended Fund Facility (EFF) to replace the Standby on December 18.
December 2009 performance criteria had been met. The Fund would send
a mission in May 2010 for the first review under the EFF, with
six-monthly reviews thereafter. The IMF further reported that the
stage was set for a second set of reforms, mostly structural.
Financing from the EU, IMF, and AfDB, along with the debt
restructuring, would close the residual gaps. The Seychelles' debt
exchange offer closed on January 15; with 100% participation except
on the Eurobond, but the 84% participation on that would be
sufficient to trip the collective action clause, bringing it to 100%
as well. The World Bank opined that performance in 2009 was
"remarkable."

31. (SBU) All non-Club bilateral creditors except Kuwait had agreed
in principle to comparable treatment, and agreements were in various
stages of completion. Among banks, Nedbank agreed to follow the
terms of the South African bilateral, RBS and Barclays had concluded
negotiations, and MCB of Mauritius agreed to convert its loan to
rupees and to defer payments. Other banks were moving more slowly.

-----
Sudan
-----

32. (SBU) Sudan was added to the agenda at the request of the U.S. in
response to a letter requesting debt data that USAID had received
from the authorities. The Secretariat noted that Sudan's debts to
the Club exceeded $10 billion, payments hadn't been made in years,
and arrears had (in part) prevented Sudan from reengaging with
international financial institutions. The IMF reported Sudan had
been hit hard by the crisis, with terms of trade having fallen. Oil
accounted for 95% of exports and 60% of revenues. Net international
reserves had fallen from $2 billion in August 2008 to $350 million at
end-2009, about two weeks of imports. Structural reform efforts,
including on tax compliance and fiscal monitoring, had been
"promising."

33. (SBU) However, 2010 was likely to be challenging, with inflation
of about 10% and GDP growth of 4.5%. Challenges included significant
spending needs, inflation, dwindling reserves, and a need to broaden
the revenue base. Debt overhang was also a concern. The last debt

STATE 00013489 010 OF 012


sustainability analysis (DSA) estimated external debt at $34 billion,
about 60% of GDP, up from $15 billion in 2000. Most of this was a
buildup of arrears, but it also reflected new borrowing from Arab
countries, China, and India. In 2008 alone, Sudan contracted $1.1
billion in new debt, of which $679 million was concessional (from
regional Arab funds) and the remainder commercial, comprised of $351
million in Islamic bonds, and the remainder from India and China.
Since Sudan had no access to traditional sources of financing, it had
to raise money where it could. In response to a question from the
U.S., the Fund reported that it had not discussed debt issues with
authorities; the Bank reported having had only internal discussions.

34. (SBU) The Fund and authorities had cooperated closely for over a
decade, and performance on a succession of staff monitored programs
(SMPs) was generally good. The current SMP, concluded in May 2009,
covers the period from July 2009 through December 2010. An Article
IV mission would visit in early March. Payments to the Fund had
exceeded payments due, by about $11 million in 2009, slightly above
the $10 million target. Arrears to the IMF were still roughly $1.5
billion at the end of 2009, however. The World Bank reported that it
was not providing support to Sudan, which had been in non-accrual
status since 1994, and had arrears to IDA totaling $571 million.

35. (SBU) The U.S. asked whether others had also received letters
asking for bilateral debt data. Russia and Canada had also received
the letters, while Norway, Austria, and Denmark reported receiving
them every year. The U.S. letter, at least, had indicated that the
information was for the Central Bank's annual report, which contains
a debt table. The Secretariat suggested that those that did not
receive letters might consider providing the information to Sudan
anyway.

-------
Ukraine
-------

36. (SBU) The IMF reported that its program helped stabilize the
economy, and that the recession appeared to have bottomed out. GDP,
which had fallen 18% and 20% respectively in the first two quarters
of 2009, ended the year down 14%, and was expected to rise by 3.5% in
2010, with inflation in single digits. The exchange rate was broadly
stable, and gross reserves were $26.5 billion at end-December. The
resolution of Nadra Bank was delayed to complete restructuring of its
external debts. Preliminary agreement was reached in December, and
the government was committed to a resolution by February. The third
review of the program was delayed due to a lack of consensus by
stakeholders, with fiscal performance the main problem.

METHODOLOGICAL ISSUES


STATE 00013489 011 OF 012


----------------------------------------
Outreach Related to Comparable Treatment
----------------------------------------

37. (SBU) The Secretariat noted that its earlier proposal for
coordinated diplomatic demarches to non-PC creditors had not received
broad support. It proposed instead that Club members stress the need
for comparable treatment in Board remarks at Article IV reviews of
problem creditors. The U.S. and most others supported this idea and
a pragmatic approach of taking advantage of all available
opportunities to raise the issue with the relevant non-PC creditors.
There was also discussion of a recent letter from Turkey, which
argued that greater participation by non-PC creditors should be
allowed in negotiations and poorer creditors should be allowed to
provide less relief. A draft response was warm on the first point
(inviting significant non-Club creditors is already standard Club
practice) but rejected the second. The Secretariat also reported
that it was still awaiting data from Israel.

---------------------------------
UNCTAD Initiative on Responsible
Borrowing and Lending
---------------------------------

38. (SBU) The Secretariat reported that it had been invited to
participate in an experts group to UNCTAD's project on responsible
lending and borrowing, noting that its contributions would strictly
follow Club orthodoxy. There was general support for the proposal,
though the U.S., supported by Germany and others, underscored that
the Secretariat should make clear in advance that its participation
did not imply Club endorsement of any final product or conclusions.

-------------
Annual Report
-------------

39. (SBU) The Secretariat circulated a draft table of contents for
the 2009 annual report. The Secretariat proposed discussing the
draft report at the April tour, with a view to approving and
publishing the report by end-May.

WORKING GROUP ON NON-INDEMNIFIED GUARANTEES

40. (SBU) After the Tour d'Horizon, there was another meeting of the
working group on non-indemnified claims. Creditors had examined the
treatments provided to Indonesia and Pakistan, and all with
guarantees reported that those had been indemnified before treatment,
suggesting that in practice concerns about unequal burden-sharing
were overblown. The U.S. also noted that its agencies found no case
where Paris Club treatment was followed by default on an untreated

STATE 00013489 012 OF 012


guaranteed loan. The U.S. reiterated its view that there was no
clear evidence that the status quo was problematic, a view supported
by Canada and Russia. Germany disagreed, arguing that standard
agreed minute language on coverage of guarantees was not limited to
those that had been indemnified. The Secretariat, conceding that
consensus was not possible, indicated that it would prepare a working
paper which would cover the Club's intention to: enhance transparency
through expanded data calls; provide equivalent treatment when
guarantees have been indemnified; continue the status quo in cases of
non-default; and consider possible changes to standard agreed minute
wording on debts covered.

41. (U) For additional information on any of the countries or issues
mentioned above, please contact EEB/IFD/OMA David Freudenwald at
freudenwalddj@state.gov or Nicholle Manz at manznm@state.gov.


CLINTON
CLINTON

© Scoop Media

 
 
 
World Headlines

 


UN: UNHCR Chief Urges Better Support For 13 Million 'Exhausted' And Displaced Syrians
UN High Commissioner for Refugees, Filippo Grandi, has urged greater international support for the more than 13 million Syrians who’ve been displaced in the past 10 years...More>>


>UN: Recent Kosovo-Serbia Tensions Could ‘Unravel Steady But Fragile Progress’

Tensions over vehicle licence plates and anti-smuggling operations, between authorities in Kosovo and Serbia, in recent weeks, may contribute to unravelling “steady but fragile progress made in rebuilding trust among communities” in Kosovo and Serbia...
More>>

ITUC: Nobel Prize In Economics Explodes Minimum Wage And Jobs Myth

The prize was awarded to David Card, Joshua Angrist and Guido Imbens for real-world research in the 1990s that demonstrated, empirically, that the idea touted by conservative economists that higher minimum wages mean fewer jobs is not based on fact... More>>

Focus On: UN SDGs


UN: With Clock Ticking, Sustainable Transport Key To Global Goals
From electric cars and buses to zero-carbon producing energy sources, new and emerging technologies along with innovative policy changes, are critical for combating climate change. But to be effective, they must ensure that transport strategies benefit everyone, including the poorest... More>>


COP26: 7 Climate Action Highlights To Remember

A September to remember, a pivotal month for climate action commitments. From the United Nations General Assembly week to the final pre-COP meeting, last month was an important time to build momentum... More>>


UN: Global Leaders Set To Act To Increase Energy Access While Reducing Emissions At First UN Energy Summit In 40 Years

Significant new commitments for financing clean energy, increasing renewables and improving access to electricity are expected to be announced on 24 September at the UN High-level Dialogue on Energy... More>>