, middleincome countries benefited from the introduction of the more favourable houston terms in 1990. when it became clear that even the more concessional debt rescheduling and reduction mechanisms were still not sufficient to attain sustainable external debt levels, particularly in a number of african low - income countries, another key policy initiative was launched in 1996 by the imf and the world bank : the heavily indebted poor countries initiative ( hipc ). under this initiative, the entire international community, including some multilateral institutions, decided to take coordinated action to reduce the debt burdens of eligible countries to sustainable levels. in this context, paris club creditors agreed to increase the reduction in the net present value of eligible debt up to 80 % under the lyon terms and, in 2000, up to 90 % or even more under the cologne terms. the financial implications of these decisions were substantial : around 36 % of the initiative ’ s total cost, amounting to usd 38 billion thus far, has been borne by paris club creditors. finally, the hipc initiative has been supplemented in 2005 by the multilateral debt relief initiative, which allows for 100 % debt relief by multilateral institutions for countries completing the hipc process. this marked a major break with the principle of preferred creditor status of international financial institutions. looking at the most recent past of the paris club, another development worth noting is that the number of countries rescheduling with paris club creditors has been declining significantly. besides the more general macroeconomic developments i recalled at the beginning of this talk, this desirable trend is also due to two more specific developments : first, the more comprehensive debt stock treatment of low income countries ; and second, a graduation from rescheduling of most middle - income countries as a result of the implementation of economic reforms that have increased their access to market financing and thus private creditors. indeed, while official flows to emerging markets were dominant in the 1980s, reaching on average over 60 % of total flows, the 1990s saw a dramatic increase in private flows, which on average accounted for around 85 % in the period from 1990 until 2003. accordingly, the paris club has been paying increasing attention to coordination with private sector creditors. in particular, early discussions can be scheduled when the proportion of private external debt is deemed significant and when comparability of treatment is an issue. also, interaction between paris club creditors and private sector representatives can be initiated if private creditors indicate their willingness to help restore debt sustainability in good faith and if a

jean - claude trichet : celebrating the 50th anniversary of the paris club speech by mr jean - claude trichet, president of the european central bank, at the celebration of the 50th anniversary of the paris club, paris, 14 june 2006. * * * it is a great pleasure to be here in paris on the occasion of the 50th anniversary of the paris club. this is not only because the paris club is an important forum that has made a major contribution in the area of orderly debt restructuring, but also because i have of course a lot of personal memories of the long time – from 1982 until 1993 – that i spent actively participating in its activities, together with a lot of close friends from all over the world. the paris club, which is responsible for the rescheduling of official bilateral credits to developing and emerging market economies, has played a remarkable role as a forum for crisis management and resolution. embedded in the international financial system, the paris club has responded to the changing international financial landscape and the various financial crises over the last few decades by systematically adapting its modus operandi to the varying needs of the different groups of indebted countries. in particular, once it was recognised that traditional mechanisms were not sufficient to attain sustainable external debt levels, the paris club introduced increasingly concessional debt restructuring terms and, as of the late 1980s, debt reduction mechanisms as well to address the rising debt burdens of certain countries. during that time, the paris club reached its peak level of activity. more recently, the number of countries rescheduling with paris club creditors has been declining, reflecting enhanced access by middle - income countries to market financing and more comprehensive debt stock treatment of low income countries. since its first debt rescheduling meeting in 1956, the paris club has been highly effective and has reached some 400 agreements with 81 debtor countries, covering a total of usd 523 billion in nominal value. the success of the paris club is understandable and, considering that these accomplishments were attained by what we could term a “ non - institution ” ( there was no international treaty or written charter to set up the paris club ), may therefore appear to be a paradox at first sight. the operations of the paris club over the last five decades reflect both the way in which developing and emerging market economies have benefited from economic and financial globalisation and the challenges that they have been faced with during this process. let me be more specific on the substantial benefits of economic and financial globalisation and the inevitable