Paris Club

The Paris Club is an informal group of creditor nations that works to find sustainable solutions for debtor countries struggling with debt. It began with a first meeting in 1956, after Argentina asked to sit down with its public creditors. The Club handles public claims—debts owed by foreign governments or their private sectors, as long as those debts are backed by a public guarantee from a Paris Club member. A similar setup for private creditors, the London Club, was created in 1970, modeling itself on the Paris Club as an informal group of commercial banks that jointly renegotiate sovereign debt they can no longer collect.

Creditor countries meet about ten times a year for both general discussions (“Tour d’Horizon”) and formal negotiation sessions. The French Treasury provides a small secretariat to support the Club’s work, and the Director General of the French Treasury serves as its chair. So far, the Paris Club has completed 478 agreements with 102 debtor countries, rescheduling roughly USD 611 billion in debt.

The Club has 22 permanent members, each typically represented by a senior official from its finance ministry. Other official creditors may join negotiations or monthly Tours d’Horizon if permanent members and the debtor country agree. These ad hoc participants must act in good faith and follow the Club’s practices. Countries that have taken part this way include Argentina, China, Czech Republic, India, Kuwait, Mexico, Morocco, New Zealand, Portugal, Saudi Arabia, Trinidad and Tobago, Turkey, and the United Arab Emirates.

Observers can attend negotiating sessions but cannot take part in the talks or sign the resulting agreement. There are three types: representatives from international institutions (such as the IMF, World Bank, OECD, UNCTAD, European Commission, and several development banks); permanent members that have no claims in the specific debt treatment (for example, because their claims are too small or they are not creditors of that debtor); and non-member countries that have claims on the debtor but cannot sign as ad hoc participants, provided permanent members and the debtor agree.

The Secretariat, made up of about a dozen people from the French Directorate General of the Treasury and led by a Secretary General, prepares negotiation sessions.