<h6><strong>The Diplomat</strong></h6> <h4><strong>The Government of Spain will present two initiatives for the creation of a Debt Swap Hub and an Alliance for Debt Suspension Clauses “to help vulnerable countries move toward more sustainable development” at the IV International Conference on Financing for Development, to be held in Seville from June 30 to July 3.</strong></h4> This was announced this week by the Minister of Economy, Trade, and Business, Carlos Cuerpo, during a conference organized at Casa de América by the Ministry together with the Climate Emergency Collaboration Group, the Children's Investment Fund Foundation, and the Sustainable Sovereign Debt Hub, as part of a series of events leading up to the IV International Conference on Financing for Development in Seville. "Multilateral action and our international institutions are under pressure," stated Cuerpo during the opening of the conference. “Today, more than ever, we need a revolution in development financing. The international financial architecture must adapt or risk falling short of this moment,” he warned. “To achieve this, Seville comes at the right time and offers an unprecedented opportunity to change this trend, transform discourse into action, and contribute to a renewed global financial framework that truly works,” he added. According to United Nations data, compiled by the minister, $29 trillion in sovereign debt currently rests with developing countries, and 48 countries home to 3.3 billion people already spend more on interest than on education or healthcare. “These are not just numbers: these are schools that are not being built, vaccines that are not being delivered, opportunities to build a better world that are being missed,” he warned. The two initiatives announced, a Debt Swap Hub and a Debt Standstill Alliance, are part of the Seville Platform for Action (SPA), which, according to the government, “represents This is a novelty compared to previous conferences and will provide a framework for presenting development financing initiatives that require monitoring over time.” The Debt Swap Hub, in collaboration with the World Bank, will seek to improve the design and implementation of debt-for-development swaps by facilitating knowledge sharing, standardization, and learning from best practices. Spain has extensive experience in bilateral debt swaps, with more than €1.6 billion in conversion programs in 28 countries to date. “The objective is to harness the great potential of these swaps, not only to alleviate debt burdens, but above all to help vulnerable countries move toward more sustainable development,” the Executive stated. The second proposal is the creation of an Alliance for Debt Suspension Clauses, which aims to promote a coalition of countries and institutions committed to promoting support from public and private creditors for the implementation of debt suspension clauses, providing fiscal space for vulnerable countries in times of crisis. crisis. Spain already has experience in this area. In 2024, the government approved a new policy under which all new sovereign loans and restructurings for low- and lower-middle-income countries will include debt suspension clauses. In May of that year, the first loan with a debt suspension clause was signed—with Rwanda—paving the way for broader adoption. In Seville, Spain will invite as many actors as possible—governments, multilateral banks, and private investors—to join the Alliance, in order to advance widespread adoption of these types of clauses by both public and private actors. The goal is for them to commit to incorporating them into their loan contracts and to work together in a second phase to standardize them, facilitating their adoption by both debtors and creditors.
