Q. With reference to the “G20 Common Framework”, consider the following statements:
1. It is an initiative endorsed by the G20 together with the Paris Club.
2. It is an initiative to support Low Income Countries with unsustainable debt.
Which of the statements given above is/are correct?
Exp) Option c is the correct answer.
To address the problem of unsustainable debt levels, the G20 reached agreement in November 2020 on a Common Framework for Debt Treatments.
Statement 1 is correct: The Common Framework for debt treatment beyond the DSSI (Common Framework) is an initiative endorsed by the G20, together with the Paris Club.
Statement 2 is correct: The Common Framework for debt treatment beyond the DSSI (Common Framework) is an initiative to support, in a structural manner, Low Income Countries with unsustainable debt. The Common Framework considers debt treatment, on a case-by-case basis, driven by requests from eligible debtor countries. In response to a request for debt treatment, a Creditor Committee is convened. Negotiations are supported by the IMF and the World Bank, including through their Debt Sustainability Analysis.
Source) https://www.cgdev.org/blog/fix-common-framework-debt-it-too-late
https://www.mef.gov.it/en/G20-Italy/common-framework.html
The G20 Common Framework for Debt Treatments Must Be Stepped Up
