Q. With reference to the “G20 Common Framework”, consider the following statements:

  1. It is an initiative endorsed by the G20 together with the Paris Club.
  2. It is an initiative to support Low Income Countries with unsustainable debt.

Which of the statements given above is/are correct?

  • 1 only
  • 2 only
  • Both 1 and 2
  • Neither 1 nor 2

Answer: (c) Both 1 and 2

Notes:
  • To address the problem of unsustainable debt levels, the G20 reached agreement in November 2020 on a Common Framework for Debt Treatments.
  • The Common Framework for debt treatment beyond the DSSI (Common Framework) is an initiative to support, in a structural manner, Low Income Countries with unsustainable debt. 
  • The Common Framework considers debt treatment, on a case-by-case basis, driven by requests from eligible debtor countries. In response to a request for debt treatment, a Creditor Committee is convened. Negotiations are supported by the IMF and the World Bank, including through their Debt Sustainability Analysis.

Also Read: G20