Paris Club demands overhaul of G20 debt restructuring framework

While debt crises have ebbed since the initial post-COVID surge, the mechanism meant to resolve them remains under heavy scrutiny. Critics argue the current process is too slow to provide meaningful relief for the world's most vulnerable economies. Thomas Revial, co-chair of the Paris Club, emphasized that the framework must accelerate its delivery and ensure all creditors participate in equitable burden-sharing.

Proposed reforms remain a point of contention among major stakeholders. China is pushing for stricter enforcement of the comparability of treatment principle to ensure all lenders absorb proportional losses. Conversely, the International Monetary Fund, the World Bank, and Ethiopia are advocating for a more synchronized approach, allowing all creditors to negotiate agreements simultaneously to prevent the bottlenecks that have historically stalled debt resolution.