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Why do we need a framework convention on sovereign debt?
The world is experiencing another debt crisis. More than three billion people live in countries that spend more on interest payments than on education or health.1 In 2024, external debt service payments reached an all-time high for countries in the global south, with 45 nations dedicating over 15 per cent of government revenues to debt servicing. This crisis has also reached several European countries, including Ukraine, the Republic of Moldova, and Uzbekistan, which have reached critical debt levels in the last three years. At the heart of the problem is the absence of a fair and equitable debt resolution mechanism, which leaves countries with limited options to avoid default. An agreement on the need for a debt convention would open up an intergovernmental process towards the debt architecture reform needed to prevent unsustainable and illegitimate debt accumulation and provide fair and sustainable solutions to sovereign debt crises across the globe […]