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Addressing Sovereign Debt Challenges in the Era of Covid-19 and Beyond: The Role of the United Nations

The COVID-19 pandemic has caused an extraordinary socioeconomic crisis throughout the world. To control the spread of the deadly virus and reduce pressure on overwhelmed health systems, governments have imposed unprecedented social distancing policies, including lockdowns, business closures and travel bans. These emergency policies have succeeded in flattening the curve of contagion and saved lives, but they also have resulted in the sudden disappearance of millions of jobs, and countless business being brought to be verge of bankruptcy. These socioeconomic consequences have been met with a robust and fast policy response. According to IMF (2020a), the global fiscal response as of September 2020 – which included additional spending, temporary tax cuts and liquidity support to businesses through loans, guarantees, and capital injections – amounted to $11.7 trillion, or close to 12 per cent of global gross domestic product (GDP). The global monetary response has been equally aggressive, with central banks of the G10 countries expanding their balance sheets by $7.5 trillion, and 20 emerging market central banks deploying asset purchases for the first time (IMF, 2020b). […]