ABSTRACT
I would like to begin by offering some comments on the progress that has been made over the last year or so on the sovereign debt restructuring issue. In the view of the US Treasury, the agreement reached on April 20, 2002, on the G7 Action Plan represents a useful step forward. To review, the G7 agreed to work with emerging market countries and creditors to incorporate standardised contingency clauses into debt contracts. It was envisioned that these would include a majority action clause, an engagement clause, and would specify a process by which a rescheduling or restructuring would be initiated. The G7 pledged to work with the IMF to provide incentives for the adoption of these clauses. The Action plan also pledged to limit official sector lending to normal levels, except when circumstances justify. Limiting official lending was seen as an essential part of the plan. The Action Plan also pledged the G7 to work with the IMF to clarify its lending into arrears policy.
