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G-7 finance chiefs committed to G-20 debt relief plan over pandemic

Japanese Finance Minister Taro Aso meets the press in Tokyo on May 27, 2020, after the government approved the second fiscal 2020 supplementary budget plan, focusing on anti-coronavirus measures. (Kyodo)

TOKYO (Kyodo) -- Finance ministers from the Group of Seven industrialized nations said Wednesday they agreed to support a debt relief program of the Group of 20 major economies for developing countries to help them fight the novel coronavirus pandemic.

    The G-7 finance ministers said in a joint statement after a teleconference that they are "committed to implementing" the initiative, which was agreed on by the G-20 countries and other creditors in April.

    The ministers stressed the importance of such relief measures, as they said that suspension of debt payments for the "poorest countries" until the end of 2020, at least, is "providing those countries fiscal space to fund social, health and other measures to respond to the pandemic."

    The virtual meeting took place amid growing concern over capital outflows from emerging economies, with uncertainty caused by the pandemic hitting investor sentiment.

    In mid-April, the G-7 finance ministers pledged in a videoconference with the group's central bank governors to suspend debt payments by "the most vulnerable and poorest countries" if all of the Group of 20 economies agreed to do so.

    The G-20 finance chiefs subsequently supported the G-7 move, saying in a statement after a virtual meeting that the suspension of debt payments would start on May 1 and creditors would also consider a potential extension during the year.

    The G-7 and G-20 talks followed an earlier announcement by the International Monetary Fund on immediate debt relief for 25 developing countries, including 19 African nations, to be offered through its revamped $500 million Catastrophe Containment and Relief Trust measures.

    In the latest statement, the G-7 ministers said they "look forward to multilateral development banks providing further details" on the way they intend to help debtor nations under the program.

    "We remain committed to assisting low-income countries in their responses to the COVID-19 pandemic," they added.

    Japanese Finance Minister Taro Aso told reporters after the teleconference that Japan will "closely cooperate" with other G-7 nations toward the early containment of the virus spread and strong recovery of the global economy.

    Aso also said that discussion is "progressing" on a plan proposed by Japan that would ensure developing countries have access to affordable drugs and vaccines for the treatment of COVID-19 by internationally managing related patents.

    Asked about U.S. President Donald Trump's idea of the expanded G-7 framework joined by countries such as Australia and South Korea, Aso replied the decision ultimately rests on the United States, this year's G-7 chair. "Now is not the time to judge whether it is a good or bad (idea)," he said.

    The leaders of the G-7, which groups Britain, Canada, France, Germany, Italy, Japan and the United States as well as the European Union, agreed in emergency telephone talks in mid-March to regularly communicate on issues related to the pandemic through their finance ministers.

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