G24 urged IMF to remove interest surcharges on debt payments

“Given that this is the year for the IMF to review its policies on access limits and interest rate surcharges, we urge the IMF to correct the regressive and pro-cyclical nature of the surcharge policy and to consider specific measures, such as the suspension of these surcharges. . at this time to help the economic recovery of countries. We encourage the IMF to continue to consider a permanent significant reduction in surcharges or their elimination, ”said one paragraph of the statement.

Guzmán had declared that the surtax policy is “regressive and procyclical”, (the same words the G24 says today in its statement): “it is unequal, because it disproportionately affects emerging and middle-income countries with the lowest quotas, and it is procyclical, because it imposes harsher conditions on countries with more unfavorable market conditions ”.

The G24 statement comes at a time when Argentina faces the last stage of negotiations with the IMF for the repayment of the debt of more than 44 billion dollars assumed by the government of Mauricio Macri.

“An immediate suspension of surcharges during policy reviews would help countries recover,” Guzmán said during his participation.

This is the full participation of Guzmán:

The first necessary step for a sustainable and equitable recovery is to ensure equitable access to vaccines. The divergence in access to vaccines is worrying, both in terms of humanitarian and economic consequences. Add asymmetries to existing asymmetries that are already important. If we do not change the situation in the post-pandemic period, an even more unequal world will arise, with more economic, social and political instabilities. Therefore, we must work together to bring about change on this crucial issue.

A second necessary step for an inclusive recovery is increased liquidity for developing countries. In this regard, we strongly support a new global SDR allocation in the amount of $ 650 billion and congratulate and celebrate the positive and effective leadership of Kristalina Georgieva for this achievement.

We also call for an exploration of options for the voluntary reallocation of unused SDRs to all developing countries in need of liquidity, including emerging and middle-income economies.

I want to celebrate the position of the G24 by stressing the urgent need to review the policy on access limits and interest rate surcharges in IMF lending programs, which is a regressive and pro-cyclical policy that affects more countries which are the most adverse circumstances and which is not in line with the mission of improving global financial stability. In the context of the pandemic, an immediate suspension of surcharges, while policies are revised, would help countries recover and should be considered.

We must continue to work to create better frameworks in order to have more global public goods and to protect existing goods in a way that promotes greater economic and financial stability, as well as a more sustainable mode of production that protects our environment. The environment and I hope that we can work together to make meaningful progress in 2021 on all these issues.