Resolution on the communication from the Commission on support for structural adjustment and debt relief in heavily indebted ACP states - a Community response to the HIPC debt initiative, and on the proposal for a Council Decision concerning Exceptional Assistance for the Heavily Indebted ACP countries (COM(97)0129 C4-0243/97)
Date: 1998-01-16
Institutions: Committee on Development, European Parliament
Subjects: ACP countries, Community loan, European Development Fund, European Investment Bank, debt reduction













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51997IP0382

Resolution on the communication from the Commission on support for structural adjustment and debt relief in heavily indebted ACP states - a Community response to the HIPC debt initiative, and on the proposal for a Council Decision concerning Exceptional Assistance for the Heavily Indebted ACP countries (COM(97)0129 C4-0243/97)  


Official Journal C 034 , 02/02/1998 P. 0196 





A4-0382/97Resolution on the communication from the Commission on support for structural adjustment and debt relief in heavily indebted ACP states - a Community response to the HIPC debt initiative, and on the proposal for a Council Decision concerning Exceptional Assistance for the Heavily Indebted ACP countries (COM(97)0129 - C4-0243/97)The European Parliament,- having regard to the communication from the Commission and its proposal for a Council Decision (COM(97)0129 - C4-0243/97),- having regard to the report of the Committee on Development and Cooperation and the opinion of the Committee on Budgets (A4-0382/97),A. whereas a high level of indebtedness and debt-servicing seriously impede the economic and social development of the developing countries because they divert essential resources for investment and development and, hence, constitute one of the causes of the impoverishment of broad population groups,B. whereas, in some countries, debt repayment has resulted in an export-led economy which is permanently endangering the domestic economy and, in particular, the feeding of part of the population because it is geared purely and simply to earning foreign exchange,C. whereas indebtedness has resulted from a number of factors such as the fall in commodity prices, the irresponsible granting of loans in connection with the recycling of petrodollars, uneconomic investment as well as capital exodus, excessive expenditure on armaments and corruption, and whereas responsibility for the creation of the debt does not lie exclusively with the debtor countries,D. convinced that economic reason and solidarity with the inhabitants of the developing countries who are suffering the most as a result of indebtedness require the cancellation of part of the debt, and that the European Community, as the largest development aid donor worldwide, must make its contribution thereto,E. whereas making debt-relief dependent upon the implementation of certain programmes and projects concerning the environment and the supply of the basic needs of the inhabitants is appropriate,1. Asks to be officially consulted by the Council on this proposal, since the implementation of the Convention of Lomé involves a Community policy, and reserves its rights relating thereto with a view to the efforts being made to have the European Development Fund included in the budget;2. Welcomes the Commission proposal concerning the implementation of the proposal put forward by the International Monetary Fund and the World Bank to reduce the debt burden of some heavily indebted poor countries as an essential measure for their economic recovery and, referring to its numerous initiatives concerning debt remission, approves European Community participation in this measure; calls on the Council to adopt the proposal for a decision as soon as possible;3. Welcomes, in particular, the fact that it is now being officially admitted that the bilateral efforts to reduce debt are not enough by themselves to reduce the debt burden to a tolerable level and that the multilateral debts, hitherto regarded as being inviolable, must now be included in the debt remission strategies;4. Regrets that Agenda 2000 does not discuss the European Union's future responsibility for the Third World and the financing of aid;5. Strongly agrees with the use of the concept of debt sustainability as the target for the debt reduction initiative, but calls for human development and social indicators to be included in the definition of debt sustainability alongside macroeconomic indicators and the capacity to fulfil obligations punctually;6. Calls for a more flexible and development-oriented use of the various criteria for debt reduction under the mentioned initiative to ensure quicker and deeper debt relief for a larger group of countries, especially countries in extreme positions such as those recovering from internal conflict;7. Supports the establishment of a connection between successful and sustainable economic reform and debt relief but advocates relief measures implemented at the earliest possible opportunity in order to accelerate the economic upturn in the countries concerned;8. Emphasises that a coordinated approach by all participants is an essential precondition for the success of the HIPC initiative, also with regard to bilateral debt relief measures;9. Supports the Commission's proposal for the establishment of a single fund for all instruments, and for this fund to be managed by the EIB in parallel with the HIPC Trust Fund managed by the IDA;10. Notes that creditworthiness and standing in financial markets are of great importance for the countries concerned and calls for due publicity to be given to the debt relief measures so that the access of those countries to investment and development projects financed on credit is made easier;11. Believes that the Commission should advise the developing countries as to their debt management in order to help them to monitor their foreign debts and service their debts at the lowest possible cost;12. Believes that structural adjustment and the reforms in those countries must continue to be subsidized in order to guarantee that the success of the relief measures is permanent; in this connection, supports measures for the diversification of their economies and for the reduction of their dependence on commodity exports;13. Calls on the Council to refinance the debt of eligible countries from repayments of earlier loans;14. Believes that, in appropriate cases, the developing countries should give undertakings regarding the environment, combating poverty, supplying basic needs and other development projects in return for relief measures;15. Takes the view that the proposed measures are inadequate to provide all developing countries with the relief they require for the implementation of their economic reforms and social programmes and calls for other countries, especially those in a difficult debt situation, to be included in a debt-relief programme; calls on the Member States, therefore, to adopt a common strategy for the debt-relief measures to be taken in the various international bodies;16. Believes that these measures for the ACP States debt-relief and the measures to be taken in the future should not be assessed solely from the current viewpoint of the Member States' restrictive budgetary policy but in a long-term perspective, particularly since the European Community, as part of the HIPC initiative, is making no more than a rather symbolic 5% contribution; recalls that most Member States are still failing to honour the commitment made many years ago that they would devote 0.7% of GNP to development aid;17. Calls on the Commission to include the following modifications in its proposal for a Council Decision:(Modification 1)Citation 2a (new)>Text following EP vote>Having regard to the opinion of the European Parliament,(Modification 2)Citation 2b (new)>Text following EP vote>Having regard to the financial rules applicable to development funding cooperation under the fourth ACP-EC Convention, as amended by the agreement of 4 November 1995,(Modification 3)Recital 4a (new)>Text following EP vote>Whereas the Union budget provides for an appropriate nomenclature as regards the EDF financial instrument,(Modification 4)Article 3, second paragraph (new)>Text following EP vote>The Commission shall record each year in the financial information document on the EDF the amount of interest generated in the account opened with the EIB.(Modification 5)Article 5(1) and (2)>Original text>1. The Commission shall report regularly to the Council and inform the Parliament on the implementation of the present decision within the context of the HIPC initiative.>Text following EP vote>1. The Commission shall report regularly to the Council and Parliament on the implementation of the present decision within the context of the HIPC initiative.>Original text>2. At the end of the period of four years, mentioned in Article 4, or earlier if the Commission considers it appropriate, the Commission shall present a report to the Council containing a review of the possible needs for additional financing.>Text following EP vote>2. At the end of the period of four years, mentioned in Article 4, or earlier if the Commission considers it appropriate, the Commission shall present a report to the Council and Parliament containing a review of the possible needs for additional financing.18. Instructs its President to forward this resolution to the Commission, the Council and the governments of the Member States.