The final day of the gathering of the world’s top finance chiefs kicked off with prospects for a consensus statement still highly uncertain due to disagreements over language on Russia’s war and debt restructuring proposals.
(Bloomberg) — The final day of the gathering of the world’s top finance chiefs kicked off with prospects for a consensus statement still highly uncertain due to disagreements over language on Russia’s war and debt restructuring proposals.
“We’ll see how the day breaks,” as it “remains to be seen” whether the participants can reach a communique at the end of the meetings in Bengaluru, Australian Treasurer Jim Chalmers said on the sidelines. He said negotiators were up until 2 a.m. early Saturday, with two sticking points being the war and debt.
Geopolitical tensions have been a cloud over talks at the meetings of Group of 20 central bank governors and finance ministers, with China a central focus of negotiations on each of the top issues. A US-led coalition has called for more pressure on Vladimir Putin’s regime as the conflict reached the one-year mark Friday.
Kristalina Georgieva, managing director of the International Monetary Fund, said Saturday morning that disagreements still hobbled debt restructuring talks as creditors kicked off roundtable discussions hours earlier.
The IMF chief was nonetheless positive about the global sovereign debt roundtable that has brought public and private creditors together at the negotiating table, with at least a baseline commitment to find some common ground.
At the center of the standoffs in Zambia and Sri Lanka are Chinese demands that loans made by the World Bank and other multilateral lenders be included in any restructuring. That’s partly driven by a Chinese view of those institutions as proxies for US power.
But the US and World Bank have rejected the idea, arguing any “haircut” would undermine those bodies’ ability to respond to crises and make concessional loans.
Under the system agreed at the 1944 Bretton Woods conference, the World Bank and IMF are traditionally granted seniority in restructurings as lenders of last resort, which relies on their ability to raise low-cost capital to loan at below-market rates.
The kind of meeting-ending communique that was reached in Bali in November among G-20 leaders is increasingly in doubt — with the likelihood growing that host nation India may instead issue a “chair’s summary” outlining the varying stances on issues this week.
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