Paris Club of creditors and its members. Interaction of Russia with the Paris and London clubs. Features of the activities of the Paris and London creditor clubs

The Paris and London clubs of creditors are informal informal international associations. In their composition a different number of participants, the degree of their influence is also different. The Paris and London clubs were formed to restructure the debts of developing countries. Let's consider in more detail how the relations between the RF and these associations proceeded.

Features of the activities of the Paris and London creditors' club

These associations provide for special procedures for the review and restructuring of arrears. Differences are present in the internal organization of organizations. The London Club, in fact, is a forum for reviewing the maturity of loans provided by commercial banking institutions not guaranteed by the creditor's government. There is no permanent chairman and secretariat in the association. Procedures, like the very organization of the forum, are of a free nature. The Paris Club of creditors was formed in 1956. It has 19 participants. Unlike London, the Paris Club is reviewing the debt to official creditors. If there is an immediate threat of non-payment of a loan, the government of the debtor appeals to the state authorities of France. A formal request for negotiations with the lender is sent.

Conversation

The Paris Club organizes direct communication between the debtor country and the state that provided the loan. The first is the Minister of Finance or the Chairman of the Central Bank. On behalf of the creditor, the negotiations are attended by officials from the Ministry of Finance, the Ministry of Foreign Affairs or the Ministry of Economy. Also there are observers. They are representatives of the IBRD, IMF, UNCTAD and regional banking structures. A set of recommendations is being developed in the negotiation process. The agreed terms are fixed in the protocol. This document is legally only recommendatory. The proposal is made to representatives of the countries, between which a financial dispute has arisen, about holding negotiations and signing bilateral agreements on the revision of the terms for the repayment of obligations. Although the content is of the nature of a recommendation, the provisions of the protocol are binding on the parties that accepted it. In accordance with it, agreements are concluded, which, in turn, have legal force. The adoption of decisions, the establishment of conditions is carried out on the basis of consensus. That is, the outcome of negotiations should suit both sides.

Restructuring of Soviet debt

It should be noted that relations with the London Club after the end of the existence of the USSR were accompanied by a number of problems. The Soviet Union is considered the largest debtor from all countries. In 1991, the first problems arose. Then Moscow refused to pay interest on the loan of the USSR. Within the framework of the London Club, a special council was convened. It included 13 commercial banking structures, to which the Russian Federation was in arrears. The main task was to settle the obligations of the former USSR. In general, the question is quite simple. However, it was difficult to solve it. Until the fall of 1997 regular meetings of the council were held. Once in three months, decisions were made on deferring payments and interest for another 3 months. The position of the BCC (Council) was quite tough from the very beginning. It was assumed that Moscow, even with a delay, must pay everything. This position was clearly formulated in 1993. I must say that until this point in Moscow there was no clear idea of the actual size of the obligations of the USSR. It was assumed that the total debt is 80-120 billion dollars. Given that the volume of the gold and currency fund was about $ 5 billion, it is clear that the payment was almost impossible.

Start of settlement

The first steps were taken by A. Shokhin in 1994. At that time he was the vice-premier in the government. Shokhin was able to agree with Fonts (the head of the BPC) on a five-year grace period on interest and debt repayment after 10 years. But this measure was regarded as temporary. It was supposed to radically re-register the main share of liabilities and accumulated interest in government bonds of the Russian Federation. The next step was implemented in 1995 by the new vice-premier V. Panskov. He agreed on a 25-year restructuring. After that, Moscow had a choice. She could insist on writing off the bulk of the debt or go for further restructuring. Most preferred, of course, looked like the first option. But its adoption was practically impossible due to the tough position of German banks. They accounted for about 53% of the debt. After some hesitation, it was decided to go on to further restructuring.

The nuances of write-offs

First of all, this opportunity is provided only once. At the same time, the debtor needs to repay the balance on a fairly strict schedule. In addition, the status of new securities, in which the debt is being re-registered, corresponds to eurobonds. In case of any delay, a default is declared on them. This, accordingly, entails a sharp decline in the rating of the state and its isolation in international financial markets.

Further developments

In August 2009, the government approved the initiative of the Ministry of Finance to settle the external debt of the USSR. It was assumed that about $ 34 million would be paid. At the same time, the creditors of 9 million did not state their claims on the settlement of the debt. In the future, negotiations with them were not planned. As a result of the undertaken steps, the Ministry of Finance managed to complete the payment of commercial debt by exchanging $ 405.8 million for Eurobonds, the maturity of which is 2010 and 2030. At the same time, the total number of claims, according to the press release of the Ministry, exceeded 1900.

Paris Club of creditors and Russia

After the collapse of the USSR it was assumed that the newly formed states would bear their part of the responsibility for the existing external debt. At that time, it amounted to 90 billion dollars. Together with the debt to each state relied and the corresponding share in the assets. However, in practice it turned out that only Russia could fulfill its obligations. In this connection, by mutual agreement, it was decided that the Russian Federation takes over all the debts of the republics in return for their refusal from the shares due in the assets. This was quite a difficult decision, but it allowed to preserve the country's position in the world markets and helped to build the confidence of potential foreign investors.

Stages of negotiations

The Paris Club and Russia held negotiations in several stages. They began immediately after the official announcement of the end of the existence of the USSR. The first stage takes counts since 1992. Within its framework, the Paris Club of Creditors provided short-term three-month postponements for the repayment of foreign debt. The same stage involves obtaining a loan from the IMF for $ 1 billion. The second stage was held from 1993 to 1995. The Paris Club agreed on the signing of the first agreements with Russia on restructuring. Under these treaties, the country assumed all the obligations of the USSR, the maturity of which was for the period from December 1991 to January 1995. The third stage began in April 1996. The Russian Federation and the Paris Club of creditors have supplemented their agreements with a comprehensive agreement. In accordance with it, the total debt was about 38 billion dollars. At the same time, 15% of them were supposed to be repaid within the next 25 years, until 2020, and 55%, which included short-term debts - for 21 years. The restructured debt was to be paid in incremental amounts from 2002.

Memorandum

It was signed on September 17, 1997. The Paris Club and the Russian Federation concluded a Memorandum of Understanding. He formalized the accession of the country to the union as a full participant. Since the signing of the document, the debt claims from Russia have the same status as the rest of the countries.

Protocol

On June 30, 2006, it was announced about the early repayment of the debt. At the time of signing the corresponding protocol, the amount of obligations amounted to 21.6 billion dollars. This debt was restructured in 1996 and 1999. Until 2006, Russia serviced and repaid obligations. The protocol provided for the payment of part of the debt at nominal, and part - at market value. At the last, obligations that had a fixed rate were redeemed. Loans of this kind were provided by such members of the Paris Club as the Netherlands, Great Britain, France and Germany. The premium for early repayment for these countries amounted to almost $ 1 billion. The repayment of US debt was carried out at par, although America also provided a loan at a fixed rate.

Recent Payments

After the agreements A. Kudrin reported that Vnesheconombank will close the debt until August 21. It was at this date that the Paris Club received interest payments from the Russian Federation. The head of the Ministry of Finance fulfilled his promise. In the middle of the day on August 21, the official page of the bank showed that the last transfers to the accounts of the lenders were made. Thus, the planned payments amounted to 1.27 billion dollars, on account of the early payment was sent to 22.47 billion. One of the first countries whose accounts have replenished, is Australia. Mark Vale (Deputy Prime Minister) said then that early repayment points to the strengthening of the Russian economy and acts as a key element of bilateral relations. Prior to the signing of the June agreements, the Russian Federation was considered the largest debtor. The Paris Club has concentrated its work on reaching agreements with Moscow since the collapse of the USSR. After paying off all debts, many specialists began to talk about the advisability of the further functioning of this association. In addition to Russia, ahead of schedule, countries such as Peru, Algeria are paying off their obligations. Some time ago, the Paris Club did not expect that these states could not simply pay their debts, but do it ahead of schedule. Payments Vnesheconombank was carried out in nine currencies. To transfer funds, the Ministry of Finance previously exchanged 600 billion rubles in euros and dollars. The main payments were in these currencies. After the full repayment of debts, Russia became a full member of the Paris Club.

Results

Despite the problems that accompanied the interaction of Russia with the Paris and London clubs, Russia managed to get rid of the old debts. These associations from the very beginning of their existence act as the most important link between the countries that provide and accept monetary obligations. They seek to alleviate the burden of States in directly servicing their debts. Together with this, their goal is to preserve the borrower's solvency in the long term. The RF seeks to approach the problems of international debt in a comprehensive manner, taking into account the interests of all parties. The debt crisis, which arose in the 90s, was the result of an unfavorable confluence of subjective and objective circumstances. Nevertheless, the Russian Federation managed to show its consistency and ability not only to accept but also fulfill its international obligations. Early payments not only made it possible to avoid arrears and delay payments, but also provided Russia with full participation in the Paris Club.

Conclusion

Currently, the credit rating is extremely important for any country. Given the difficult economic situation in the world, it is necessary to clearly understand their needs and opportunities. It should be said that the formation of public debt is caused by a budget deficit. And it, in turn, is the sum of unclosed holes in the budget for the entire period of the country's existence. External debt - obligations to natural persons and organizations of other states. It stipulates the need for the existence of such informal associations as the London and Paris clubs.