Debt restructuring talks at G20 meet hurt by differences, low attendance

GANDHINAGAR, India  – Debt restructuring talks made little progress during the third finance meeting of the G20 countries in India as the bloc was unable to overcome key differences and low attendance due to domestic issues adding to the roadblocks.

The finance ministers of the G20 countries gathered in the western Indian state of Gujarat, hoping to push for agreements on debt restructuring for vulnerable countries, global minimum taxation and reforms on multilateral development banks.

“We are not making much headway with the debt restructuring issue,” a senior official, who is part of the meeting, told Reuters on Monday.

Last month, Zambia struck a deal to restructure $6.3 billion in debt owed to governments abroad, in what was seen as a breakthrough for indebted nations around the world that have faced lengthy negotiations with their creditors.

READ:  Zambia seals $6.3-B restructuring in breakthrough for developing nations

But nations did not agree to using Zambia as a model for other restructuring and most remained unwilling to talk about fresh lending to vulnerable countries as many G20 member countries face economic challenges back home, the official said.

Ministers from many countries chose to skip the meeting, which added to the slow progress on the issue, a second official said, adding that 13 finance ministers attended the event. The United States has sent the biggest delegation, led by Treasury Secretary Janet Yellen, to the meeting.

The two-day meetings that kicked off on Monday were seen as key to setting the tone for the G20 leaders’ summit in September in New Delhi.

Officials said several finance ministers were forced to skip the meetings due to domestic issues that were a “priority”.

“This may have crimped the bloc’s decision-making ability in this meet and slowed progress on building consensus on any issue,” a third official, also present in the meeting, said.

Finance ministers from Japan, Australia, Canada, Indonesia, South Korea, Indonesia, South Africa, along with the United States and India were present.

READ: G20 finance and bank chiefs to tackle debt crisis

Argentina, Brazil, France and Mexico only sent junior-level officials, sources added.

German and British ministers did not attend the meeting. However, Germany’s central bank chief Joachim Nagel attended.

The officials did not want to be identified as they were not authorized to speak to the media. India’s finance ministry and external affairs ministry did not immediately respond to emails seeking comment.

Argentina is facing very high inflation and low growth, while in recent weeks France has struggled to contain riots sparked by the killing of a teenager in a Parisian suburb. Germany has also been hit by recession.

“In the absence of ministerial representation, officials making representation are often stating that they have to go back and consult their ministers before finalizing their stand,” an official said.