Paris Club

Why in news?

• The Paris Club, an informal group of creditor nations, will provide financial assurances to the International Monetary Fund (IMF) on Sri Lanka’s debt.
• Sri Lanka needs assurance from the Paris Club and other creditors in order to receive a USD 2.9 billion bailout package from the IMF, following an economic crisis in 2022.

About Paris Club:

• The Paris Club is an informal group of creditor nations whose objective is to find workable solutions to payment problems faced by debtor nations.
• The club has 22 permanent members including most of the western European and Scandinavian nations, the United States, the United Kingdom, and Japan.
• India is not a member of the club
• The origin of the club is traced to a meeting that happened in Paris between officials from Argentina, which had trouble paying back its debt with a group of lenders in 1956.

PRACTICE QUESTION

With reference to ‘Paris Club’, consider the following statements:

1. It is an informal group of creditor nations whose objective is to find workable solutions to payment problems faced by debtor nations

2. India is not a member of the group

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer