France urges debt freeze for poor countries

PARIS: French Finance Minister Bruno Le Maire on Thursday called for a $500-billion war chest and a debt moratorium for developing countries, especially in Africa, to help them cope with the coronavirus crisis.

The world's poorest continent is far behind other regions in terms of confirmed cases and deaths but infections are rapidly increasing amid endemic poverty and often threadbare health care.

"We have the responsibility of avoiding a drama in developing nations, especially in Africa," Le Maire said, days after urging the G20 group of rich nations to take steps to help poor countries hit by the pandemic. "We support a moratorium in the coming months on the debt of the poorest countries," he told reporters in Paris.

Le Maire also said France wanted an increase in special drawing rights (SDRs), the currency of the International Monetary Fund, to over $500 billion (460 billion euros) as well as "a swift new credit line to complement swap lines between central banks to support countries which are most in need."

Swap lines are temporary reciprocal currency arrangements between central banks primarily aimed to keep liquidity in the currency available, especially for countries which have debt in US dollars.

On March 25, the IMF and World Bank urged a freeze on debt repayments "to provide a global sense of relief for developing countries as well as a strong signal to financial markets." Nearly 6,500 cases of coronavirus have been recorded across all of Africa, 238 of them fatal, according to an AFP toll. South Africa is the worst-hit country on the continent with more than 1,400 cases, including five deaths.