Summary: 5 December 2014, New York – European Union Explanation of Vote delivered by the Permanent Mission of Italy on behalf of the EU on adoption by the General Assembly of draft resolution: Modalities for the implementation of resolution 68/304, entitled ‘Towards the establishment of a multilateral legal framework for sovereign debt restructuring processes’
– As delivered –
I have the honor to speak on behalf of the Member States of the European Union.
There should be no doubt that we recognize the importance of sovereign debt restructuring, which is not pertinent only to certain countries. We ourselves have been seriously affected, whether on the creditor or on the debtor side.
However, we are, regretfully, not in a position to support the resolution “Modalities for the implementation of resolution 68/304, entitled ‘Towards the establishment of a multilateral legal framework for sovereign debt restructuring processes'”. We have made extensive efforts and have engaged in the process in good faith, proposing and coming forward with substantive ideas on moving the process forward until the very last moment.
The fact that all our proposals have been rejected and we are now taking action on a draft very close to the original draft submitted at the outset of our discussions, makes it impossible for us to further support this process.
We consider the IMF as the primary forum to discuss sovereign debt restructuring issues. The work by the IMF has widespread support and involves extensive consultation with both issuers and creditors. We wish to recall the recent endorsement of the market-based voluntary contractual approach undertaken in the discussions within the IMF Board and that the use of collective action clauses in sovereign bond contracts has become the market norm.
As we said at the outset of negotiations, any participation by the EU and its Member States for discussions in reference to UN Resolution 68/304 would be guided by the following considerations:
- The ad-hoc committee must be limited to the elaboration of a non-binding ‘set of principles’ which builds upon a market-based voluntary contractual approach to sovereign debt restructuring and aims at furthering its implementation and use. Neither the EU nor Member States will participate in discussions aiming at the establishment of a binding multilateral legal framework for sovereign debt restructuring processes.
- The ad-hoc committee should reflect the recent and ongoing work on sovereign debt restructuring undertaken in the IMF, subject to the previous considerations, and should take place in close coordination with and with technical support from the Fund. Discussions should also make reference to the work in other fora on these issues, such as the Paris Club, which has a history of discussing sovereign debt restructuring issues.
Together with many other member states present here today, we remain actively engaged in ongoing discussions in other fora that address, and seek to identify solutions to, the issue of sovereign debt restructuring. We are strong supporters of ongoing IMF work on the contractual framework to address collective action problems in sovereign debt restructuring. We are also actively engaged in the Paris Club and the Paris Forum discussions on debt restructuring. We continue to view these institutions and Forums as the appropriate place to identify multilateral solutions and reach consensus solutions to the matter at hand.
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