Options for lower debt burdens on Governments of heavily indebted developing countries include debt cancellation and debt swaps for sustainable development.

The demand for debt repayment confronts the philosophy of debt forgiveness.

Debt relief, debt swaps or debt cancellation could offer important means for mobilizing resources for accelerating progress towards the water and sanitation goals.

But, while debt forgiveness benefits holders of both equity and debt, debt holders don t voluntarily agree to it for two reasons.

A New Deal for Debt Overhangs?

For farmers, this means deeper debt.

Need for broader external debt relief

Instead, they focused exclusively on US foreign debt, ignoring household debt (mortgage and consumer debt), public debt, business debt, and financial debt.

The link between sovereign debt and bank debt has to be broken once and for all.

A similar pattern holds for public debt.

Calls for immediate debt restructuring went unheeded.

With the onset of the European sovereign debt crisis in 2010, banks appetite for public debt fell again.

But the principle of debt forgiveness clearly has applications for public debt as well, especially in the eurozone.

Alternatively, the debt holders can agree to reduce the face value of debt, in exchange for some warrants.

UNCTAD should continue its work in the area of debt, including the study of the application of debt for equity swaps for development.

Debt sustainability and debt relief

China s non financial corporate debt accounts for roughly 62 of total debt 30 40 higher than in other countries.

Thus, the Paris Club's Evian approach relies on IMF Debt Sustainability Analysis for determining the terms of debt reschedulings.

Concerned that many developing countries continue to struggle for a durable solution to their serious debt problems, where continuing debt and debt servicing obligations adversely affect their sustainable development,

Nonetheless, Argentina s latest debt trauma shows that the global system for sovereign debt workouts remains badly in need of repair.

Finally, GDP indexed bonds and other tools for dealing sensibly with unsustainable debt could be applied exclusively to member states debt not covered by the program and in line with international best practices for sovereign debt management.

First, Greek debt reduction was postponed for too long.

It is lobbying the troika for further debt relief.

Debt sustainability indicators for Haiti are mixed. It is estimated that the debt export ratio in net present value terms is high (187 per cent), suggesting that Haiti's debt is unsustainable.

More debt relief encompassing more countries and more debt (including bilateral debt) is needed.

In 2007, the mortgage and consumer debt to GDP ratio was more than 90 , compared to 24 for net foreign debt.

As during the Great Depression and in many debt restructurings, it makes sense in the current contingency to mandate partial debt forgiveness or a debt for equity swap in the financial sector.

Fifth, debt burdens that cannot be eased by growth, savings, or inflation must be rendered sustainable through orderly debt restructuring, debt reduction, and conversion of debt into equity. This needs to be carried out for insolvent governments, households, and financial institutions alike.

Can we engineer new debt contracts for countries like Argentina?

So the need for debt restructuring is an unavoidable reality.

Moreover, the US is paying for these wars with debt.

Several participants expressed the need for unconditional cancellation of debt.

A third crucial issue was debt relief for poor countries.

PRINCETON Any economic slowdown increases debt burdens, whether for households or for states.

(g) To establish effective debt tracking mechanisms in developing countries and strengthen technical assistance for external debt management and debt tracking, including through enhanced cooperation and coordination between organizations providing assistance in this regard

Such a debt conversion program would offer five benefits. For starters, unlike the ECB s current quantitative easing, it would involve no debt monetization.

Forcing a debt for equity swap or debt forgiveness would be no greater a violation of private property rights than a massive bailout.

Of the 42 countries qualified as potentially eligible for debt relief in September 2004, 27 had received debt service relief of 32 billion.

For instance, the SADC countries have a total debt stock of 78.1 billion, with an annual total debt service amounting to 6.8 billion.

PRINCETON Any economic slowdown increases debt burdens, whether for households or for states. Today, both are looking for ways to reduce the weight of debt and some would prefer to escape it.

Unsustainable private debt problems must be resolved by defaults, debt reductions, and conversion of debt into equity.

Debt

C. The Group of Eight proposals for debt cancellation for Heavily Indebted Poor Countries

Debtor countries pay substantial risk premiums for financing their government debt.

The European debt crisis, for example, remains far from being resolved.