In its meeting yesterday, 10 September 2015, the General Assembly of the United Nations adopted principles for a fair resolution of debt crises. The majority of member states voted in favor of the principles, with only 41 countries abstaining and 6 voting against the proposal.
Although this outcome falls behind expectations for the creation of a global State insolvency regime, civil society organization like erlassjahr.de, the German counterpart of the international Jubilee Debt campaign, welcomed the adoption of the principles.
The UN General Assembly has decided nine principles for dealing with sovereign debt crises as part of a resolution: sovereignty, good faith, transparency, impartiality, equitable treatment, sovereign immunity, legitimacy, sustainability and restructuring majority.
Mara Liebal, spokeswoman for erlassjahr.de, commented: "With the adoption of the principles the international community provides a basis to continue to resolve debt crises fairly and efficiently. But for the principles to take effect, they must be worked into a follow-up process on legally binding procedures."
By adopting the principles, a process started September 2014 finds its preliminary conclusion. Then, a group of developing and emerging countries had taken the initiative to create a sovereign debt resolution mechanism under the auspices of the United Nations. "The final resolution adopted with the nine principles falls far short of the original demand for a legal framework for the insolvency of States. It is a shame that Germany has nevertheless voted against the resolution. Along with few rich countries, the federal government puts the application of principles at risk, that have the potential to improve the living conditions of millions of people in over-indebted states." said Liebal.
Six countries voted against the final resolution: Germany, Great Britain, Israel, Japan, Canada and the United States.