Finance Term: Paris Club

19 Sep

An informal group of creditor nations whose objective is to find workable  solutions to payment problems faced by debtor nations. The Paris Club has 19  permanent members, including most of the western European and Scandinavian  nations, the United States of America, the United Kingdom and Japan. The Paris  Club stresses the informal nature of its existence and deems itself a  “non-institution.” As an informal group, it has no official statutes and no  formal inception date, although its first meeting with a debtor nation was in  1956, with Argentina.

The members of the Paris Club meet  each month in the French capital, except for the months of February and August.  These monthly meetings may also include negotiations with one or more debtor  countries that have met the Club’s pre-conditions for debt negotiation. The main  conditions a debtor nation has to meet are that it should have a demonstrated  need for debt relief and should be committed to implementing economic reform,  which in effect means that it must already have a current program with the  International Monetary Fund (IMF) supported by a conditional arrangement.
The Paris Club has five key functioning principles: case by case,  consensus, conditionality, solidarity and comparability of treatment.


Tags: , ,

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: