A new scheme launched by the U.K. government to help lower-income countries that are struggling to pay their debts has been criticized by campaign groups as a major disappointment that will fail to bring private lenders to the table.
Under the scheme announced Monday, banks will receive government support if they introduce clauses enabling debt restructuring to go ahead where a deal is backed by a majority of lenders behind a syndicated loan. This arrangement is already built into 90% of new bonds.
Anneliese Dodds, the U.K. development minister, argued that such “collective action clauses” had pushed forward debt negotiations with Ghana and Zambia, telling the audience at a London event: “This is a great example of what market-friendly innovation can achieve.”
About the author
Rob Merrick
Rob Merrick is the U.K. Correspondent for Devex, covering FCDO and British aid. He reported on all the key events in British politics of the past 25 years from Westminster, including the financial crash, the Brexit fallout, the "Partygate" scandal, and the departures of Boris Johnson and Liz Truss. Rob has worked for The Independent and the Press Association and is a regular commentator on TV and radio. He can be reached at rob.merrick@devex.com.
