Germany has welcomed China's support for a framework for debt restructuring for low-income countries agreed by the Group of 20 (G20) major economies. In a statement, the German government said that China's announcement was "an important step in the right direction".
China's endorsement of the G20 framework is a significant development as it is the world's largest creditor, and has been criticized for not being open to debt relief for developing countries. The G20 framework aims to provide a more orderly process for restructuring the debts of countries facing economic difficulties.
The German government also expressed hope that other major creditors, including India and Saudi Arabia, would soon follow China's lead in committing to the framework.
With the support of major creditors, the framework has the potential to provide much-needed relief to low-income countries struggling with high levels of debt. These countries have been hit hard by the pandemic, and rising interest rates and inflation have made it even more difficult for them to repay their debts.
Germany emphasized that the G20 framework should be implemented as soon as possible, and that the focus should be on helping countries get back on track and strengthen their economies in the long term.
The German government also called for more progress on debt transparency, including better data on the amounts and terms of debt owed by developing countries. This will help ensure that the debt relief provided through the framework is used effectively and reaches those who need it most.
In addition to its support for the G20 framework, Germany is also pushing for a reform of the international financial architecture to make it more equitable and responsive to the needs of developing countries. This includes strengthening the International Monetary Fund (IMF) and the World Bank, and finding ways to reduce the reliance of developing countries on foreign currency debt.
By working to reform the global financial system, Germany hopes to create a more stable and sustainable global economy that works for all countries.