Campaign for debt relief gets green light from Germany

The campaign to cancel the unpayable debts of the poorest countries by 2000 has chalked up a major success with the new position announced by the German Chancellor, Gerhard Schröder, today. Following relentless pressure on the German government over the last year from Jubilee 2000 supporters in Germany and around the world, Mr Schröder called in a personal view in the Financial Times today for “a radical debt reduction in many of the poorest countries”. His statement puts debt firmly at the top of the agenda of the meeting of world leaders, the G8 Summit, which he hosts in Cologne in June. The G8 Summit in Cologne has already become the Debt Summit.

The Jubilee 2000 Coalition has targeted Germany in a series of actions, including postcards to the Minister of Finance, lobbying through the Erlassjahr 2000 movement in Germany, and the `People to People' campaign which linked supporters in Germany and Britain. A year ago Britain was receiving complaints from Chancellor Kohl about Jubilee 2000 tactics, but the new Chancellor has adopted much of the language of the movement, calling for “a fresh start” and stressing the significance of the millennium.

Adrian Lovett, Deputy Director of Jubilee 2000 Coalition said:

“The transformation in the German position is a fantastic success for thousands of Jubilee 2000 supporters around the world. Germany are no longer the bad guys – and no other country can now use them as an excuse for inaction. But as well as fine words from Mr Schröder, we need to see concrete action - and that means getting much more debt relief to many more countries.”

“The stage is now set for the G8 summit in June. There is everything to play for. The leaders of the G8 must grasp an historic opportunity and agree to cancel the unpayable debts of the poorest countries – so that we all have something to celebrate in the new millennium.”

Oxfam commented: “There is enormous political significance attached to Schröder's remarks. It represents a turning of the tide in the efforts towards debt relief, leaving Japan, Italy and the IMF increasingly isolated.”

“We think it is particularly interesting that he is talking about debt relief being linked to poverty reduction. That is absolutely right in our view. But we are also keen that we do no lose sight the delays on HIPC, which isn't providing debt relief quickly enough.”

The Financial Times, in an editorial on the 22nd January, called the announcement “well judged and well timed.” It marked “a commendable change of heart in a country that under its previous government, adopted a somewhat rigid and, given the debt relief Germany once received, unbecomingly self-righteous attitude.”

The Guardian, in an editorial headlined “Cancel debts now” said “popular pressure is now paying of; the 70,000 demonstrators in May 1998 at the last G8 Summit in Birmingham can justifiably claim Schröder's pledge as their belated reward.”

Jubilee 2000 Coalition wants to see the G8 leaders dealing with a number of key flaws in the current debt reduction process – which Mr Schröder has failed to address. These include the facts that his initiative:

• only addresses the debt burdens of around 20 countries, leaving out countries such as Malawi, Nigeria and Vietnam, desperately poor and in need of debt relief
• It does not address the question of levels of debt relief. HIPC debt relief is not delivering enough to free up resources in the poorest countries. Mozambique, which has received the most generous debt relief so far, has seen its repayments reduce from $113 million (£68 million) to $100 million (£60 million) a year, a saving of 50p per Mozambican per year.
• It does not speed the receipt of debt relief, only the point at which countries are informed of the possible levels of relief

For a more detailed analysis of Gerhard Schröder's announcement.

Concern at the continuing limitations of Schröder's announcement were also expressed by the Guardian and the Financial Times. The Financial Times said “critics have been justified in their demands for more and faster relief. These demands will not be stilled: the Jubilee 2000 campaign, for cancellation of the `unpayable' debt of the poorest countries will ensure that. The Guardian stated “the test of the pudding will be in the eating... There is no sign in Schroeder's tentative initiative of the scale or ambition of the schemes which resurrected his own country's economy postwar, and which are so urgently needed if a humanitarian injustice and environmental disaster is not carried into the next millennium.”

• Full analysis of Schröder's announcement
• Guardian coverage of Schröder's announcement
• Guardian Editorial