on the indebtedness of developing countries

The European Parliament,

-having regard to its resolution on the problem of indebtedness in the developing countriesOJ No. C 76, 23.3.1987, p. 65,

-having regard to the resolutions of the ACP-EEC Joint Assembly, in particular those adopted at its meeting in Amsterdam, on ACP debtOJ No. C 197, 27.7.1987, OJ No. C 216, 19.8.1991 and AP/520, 1.10.1991,

-having regard to the report on the external debt and development crisis by the personal representative of the Secretary-General of the United Nations for debt issues, Mr Craxi,

-having regard to the UN Secretary-General's report on the economic crisis in Africa and to the specific proposals which it puts forward,

-having regard to the breakthrough in the Paris Club in mid-December 1991 regarding the cancellation of the debts of the most severely indebted countries, the Trinidad Terms, which provide for cancellation of at least 50% of those debts,

-having regard to the Commission proposal to cancel the debts of the ACP countries to the Community,

-having regard to the report by the Committee on Development and Cooperation (A3-0028/92),

A.whereas current developments in the countries of Eastern Europe may lead to a reduction in financial support for the developing nations, particularly as aid traditionally provided by these countries to certain developing countries has ceased,

B.whereas the Gulf crisis and the embargo on Iraqi oil led to considerable fluctuation in oil prices on the world markets, which constituted an extremely serious threat both to the process of development and to the economic restructuring programmes undertaken by many developing countries,

C.whereas reviving the economies of the developing countries will require the definition of development strategies aimed at greater social justice and must go hand in hand with the promotion of pluralist democratic political structures,

D.welcoming the adoption by the ACP-EEC Joint Assembly in Amsterdam of the above-mentioned resolution on democracy and development which stresses that respect for civil and political rights is an essential condition for sustained social and economic development,

E.whereas, on 16 and 17 December 1991, the first two countries eligible for the Trinidad Terms, Nicaragua and Benin, reached agreement with the creditor countries in the Paris Club for the cancellation of between 50 and 70% of their official debts; whereas, since then, a number of other countries have obtained terms from the Paris Club which are more favourable than those laid down in the Toronto Agreement but which are still less favourable than the Trinidad Terms,

1.Stresses that indebtedness is a political, economic and social problem of the utmost importance which directly concerns both the developing countries and the industrialized nations, so closely and directly are they inter-related at the various political, economic and social levels;

2.Stresses that the debt crisis in the developing countries is accompanied by and to a large extent contributes to a crisis of economic and social development and growth, and that any solution must be considered from the point of view of essential stimulation of the acceptable internal growth of the countries concerned, given that debt remission creates a favourable climate for new investment;

3.Notes the manifest inadequacy of the various plans which have been formulated one after another on public and private debt; considers it urgently necessary to take more radical measures for reducing public and private debt going beyond mere adjustment and rescheduling; calls on the Community and its Member States to put forward proposals to this end;

4.Welcomes the inclusion of specific provisions on ACP debt in the Lomé IV Convention, but regrets that the Council has not yet approved the Commission proposal to cancel the debts of all ACP countries to the Community and the Member States;

5.Welcomes the Commission proposal to cancel the debts of all ACP countries to the Community, which complies with the wishes of the ACP countries, the ACP-EEC Joint Assembly and the European Parliament; urges the Council to take a positive decision on this matter as soon as possible;

6.Stresses that such cancellation must - in accordance with the Commission proposal - apply to debts contracted in the context of STABEX and SYSMIN transfers, special European Development Fund loans and the use of risk capital; considers, therefore, that the decision taken by the ACP-EEC Council of Ministers, which has become enforceable, applies only to STABEX transfers, is inadequate and must be supplemented without delay by a favourable decision in respect of the other financial instruments mentioned above;

7.Emphasizes, however, that measures such as the reduction or cancellation of developing countries' debts do not tackle the real causes of the economic collapse of those countries, namely the lack of economic prices for commodities and the absence of market organization;

8.Emphasizes the specific characteristics and particular vulnerability of the Least Developed Countries (LDCs), most of which are ACP States, which require differentiated treatment; considers that all the bilateral public debts of these countries should be cancelled and that all aid should be given in the form of grants; calls on the EEC and its Member States to lose no time in taking measures to achieve these objectives and to work at international level to have them recognized and applied in the context of an EEC common debt reduction policy on the basis of the Trinidad Terms;

9.Calls on the Commission, the Council and the Member States, in the light of the breakthrough achieved with the Trinidad Terms, to reopen the negotiations on ACP debt and to introduce similar arrangements for the cancellation of all ACP debt to the Community and its Member States;

10.Welcomes, in this connection, the economic declaration adopted at the London Summit of the seven major industrialized countries which recognizes that the poorest and most heavily indebted countries need additional relief measures and calls on the Paris Club to devise appropriate practical measures without delay; calls on those Member States which are also members of the Paris Club to work within this organization in accordance with the guidelines mentioned in the preceding paragraph;

11.Stresses the need to introduce new mechanisms for a substantial reduction in debt towards private bodies, particularly commercial banks, taking into account in particular the case of the LDCs and the middle-income countries, subject to guarantees that these benefits will be distributed among the population as a whole; underlines, however, the specific responsibilities of governments of countries affected by capital flight;

12.Endorses the resolution adopted by the UN Subcommittee on Human Rights in Geneva on the "fraudulent enrichment of government officials against the public interest" and considers that the new democratic states should be able to recover the national wealth misappropriated by corrupt leaders;

13.Recommends to that end that the International Court of Justice in The Hague have the power to freeze the foreign assets of corrupt leaders and that the industrialized countries reform their banking legislation to make such a freeze possible and to enable the money to be restored to the democratic authorities of the country from which it came;

14.Stresses that many developing countries are faced with serious environmental protection problems and recalls that it has declared itself in favour of a debt remission policy known as the 'debt-for-nature swap' for countries which commit themselves to effective environmental protection;

15.Considers that the debt reduction measures should be accompanied by new international financial measures which take account of social, ecological and democratic criteria in determining a realistic use and level of international credit and interest rates; considers that these criteria could be incorporated in a code of conduct for international credit;

16.Stresses that, with respect to African countries, the following measures should be given priority:

(a)continuing, extending and speeding up public debt remission for the least developed and middle-income countries particularly affected by emergencies, provided that the benefits are felt by the population as a whole;

(b)continuing and stepping up the action by the International Financial Institutions (IFIs) to provide the least developed and middle-income countries with special windows for very long-term loans at very favourable rates;

(c)continuing and improving the Paris Club's adjustment and reductions of public debt and extending concessions, subject to certain conditions, beyond the periods covered by the previous agreements;

(d)extending and strengthening the Brady plan, in respect of bank loans, for middle-income African countries within coordinated intervention programmes which include commitments to governments and IFIs;

(e)developing measures to convert (SWAP) debts to governments and to undertakings and agencies supported by public guarantees into nature protection funds to be supplemented by other resources, giving priority, subject to the agreement of the local population, to forest conservation, combating desertification and cleaning up and protecting the sea;

(f)promoting and strengthening financial and trade agreements under which future revenue from contracts for the supply of the developing countries' resources, guaranteed by special clauses ensuring connsistent and long-term application, will be used to service medium-and long-term debts to the banking sector;

17.Stresses the need for the Community and its Member States to take a series of measures designed to increase the developing countries' export revenue, i.e.

(a)by pursuing a more effective development policy which helps to ensure more efficient local processing of commodities;

(b)by introducing mechanisms to ensure a fairer return for commodities and new commodity agreements;

(c)by taking greater account of these countries' interests in international trade, in particular within the GATT negotiations and by improving its offer in its new scheme of Generalized Tariff Preferences;

18.Stresses the urgent need for a substantial increase in the flow of public finance towards the developing countries; regrets therefore that:

(a)the aim of allocating 0.7% of GNP to the developing countries, including 0.15% to the LDCs, has still not been achieved, in particular by certain Member States of the EEC;

(b)the UN Conference on the LDCs did not make substantial progress on the level of aid to be sent to these countries;

(c)the funding for Lomé IV falls short of the figure called for by the European Parliament;

(d)the section of the EEC budget set aside for development aid has not seen any significant increase for some years;

19.Considers it essential, to help the developing countries recover from the unprecedented economic and social crisis they are currently suffering, to set aside 1% of the GNP of the industrialized countries for development aid, 0.75% for the benefit of the developing countries and 0.25% for the benefit of the countries of Central and Eastern Europe;

20.Calls on the Community and its Member States to promote the establishment of a special oil facility for oil-importing countries, funded in part by countries which benefit from price rises;

21.Stresses the equally important need to promote a substantial increase in the flow of private funds, particularly private investments, towards the developing countries; welcomes, therefore, the new provisions of Lomé IV in favour of investment and private undertakings;

22.Urges the Commission to ensure that these new provisions give priority to the transfer of technology and to the needs of and participation by the local population;

23.Stresses the importance of carrying out a detailed study of the conditions likely to encourage the commercial banks to resume lending;

24.Expresses its concern at the persistent drain of capital; stresses that a broad-based dialogue must be set up at international level to endeavour to find solutions to this problem; calls on the European institutions to pursue a policy of securing the cooperation of the banks so that banking secrecy no longer poses an obstacle to the return of fugitive capital;

25.Stresses the need for many developing countries to introduce thoroughgoing economic reforms; considers that the implementation of appropriate structural adjustments is likely to help increase the flow of both public and private finance; welcomes, therefore, the provisions on structural adjustment in the Lomé IV Convention; regrets, however, that the Commission has not laid down its own criteria for intervention in this context;

26.Expresses its concern at the growing criticism of the structural adjustments implemented by international financial institutions; considers it necessary to define new implementing arrangements which are better adapted to the concerns of the countries involved, particularly in social terms; considers that the Community and its Member States must play an innovative role in defining these new objectives and arrangements;

27.Expresses concern at the brain drain from the developing countries following the measures carried out under the structural adjustment programmes, which have merely made living conditions even worse, resulting in a loss of skilled labour for the developing countries;

28.Stresses the need, with a view to facilitating and combining the specific implementation of the various techniques and procedures for dealing with and reducing debt and for encouraging new flows of funds, for a multilateral body independent of the existing international financial organizations to be established and to be given responsibility for coordinating all debt issues in the spirit of the proposals made in Mr Craxi's report for the United Nations (points 56, 85 and 127e);

29.Stresses especially the need to provide for debt remission arrangements in respect of countries which implement crop conversion measures applying to crops related to drugs production;

30.Instructs its President to forward this resolution to the Commission, the Council and the governments of the Member States.