HISTORIC PRESS RELEASE : Britain calls for EU to contribute one billion Euros to aid debt relief [September 1999]

The press release issued by HM Treasury on 20 September 1999.

A call for the EU to contribute one billion euros to aid debt relief has been issued today by the Chancellor Gordon Brown and International Development Secretary, Clare Short.

The Ministers have written to EC Commissioners Chris Patten and Poul Neilson proposing a contribution of one billion euros from the European Development Fund to aid the costs of debt relief for the most heavily indebted poor countries (HIPCs).

The Chancellor Gordon Brown said:

“Debt relief for the most heavily indebted poor countries is one of the major challenges facing all of us in the run-up to the Millennium.

“This is a major opportunity for Europe to take a strong political lead on one of the great moral issues of our time.

Development Secretary Clare Short said:

“The G7 agreed at Cologne speedier and more generous action to reduce debt relief and ensure the benefits help the poor.

“We have made the biggest pledge of $171 million for the HIPC Trust Fund. It is now time for others to back up their commitments with firm pledges of support.

“But we must also ensure that poor people have a stronger voice in ensuring the benefits of debt relief really benefit the poor.”

The Chancellor also announced that, for the first time, there will be a joint meeting of the Interim and Development Committees in Washington this coming Sunday.

A copy of the letter to the EC Commissioners is attached.

Poul Neilson
Commissioner For Development Cooperation And Humanitarian Aid

Chris Patten
Commissioner For External Relations

European Commission
Rue de Ia Loi 200
B-I 049 Brussels
BELGIUM

Dear Poul and Chris

HIPC/DEBT RELIEF: EDF CONTRIBUTION

We would like to pass on our congratulations and warmest wishes to both of you on the confirmation of your appointment as Commissioners. We are sure you are already looking forward to the challenges ahead. As you know debt relief for the most heavily indebted poor countries (HIPCS) is one of the major challenges facing the developing world in the run-up to the Millennium.

You will be aware, we wrote in April to Commissioners Pinheiro and Mann to propose a contribution of some 1 billion euro from the European Development Fund to the costs of HIPC. It is clear that the ambitious and comprehensive solution to debt and poverty proposed since then, and which will be discussed at the forthcoming Annual Meeting of the IMF and World Bank, will require additional funding, particularly for the African Development Bank and some other multilaterals. We welcome the considerable support amongst EU Finance and Development Ministers for the possibility of a contribution from the European Union to the costs of HIPC over and above the EU’s own requirements as creditor.

We understand that there are no substantive legal impediments to the use of EDF resources for HIPC. But, there has been an understandable delay, pending your assumption of duties in working up a full proposal. Now that you are in office, we urge you to make this one of your first priorities.

This is a major opportunity for Europe to take a strong political lead on one of the great issues of our time. Debt relief will be one of the most important issues to be discussed at the Annual Meetings. Although final agreement to use any of the EDF underspends rests with the joint European Union and African, Caribbean and Pacific (ACP) Ministerial Council, we believe that a Commission Position Paper outlining the options for using the IEDF in time for the Annual Meetings would be very helpful in securing agreement to a financing package for HIPC as a whole. That in turn would allow the new HIPC to be in place as the new Millennium begins. We believe that such a Position Paper from the Commission would receive widespread support from the citizens of the EU and ACP.

We are copying this letter to our EU Finance and Development colleagues.

GORDON BROWN                                 CLARE SHORT
Chancellor of the Exchequer                   Secretary of State for
International Development