Reforms are urgently needed to make the G20 Common Framework faster and more efficient for low-income countries battling economic distress, the Paris Club of creditor nations stated in its 2025 annual report released Wednesday.
The report, published at the start of the group’s annual meeting in Paris, highlights growing consensus among global financial officials that the current sovereign debt restructuring process remains slow, rigid, and inefficient.
“The Common Framework must deliver faster and swiftly embark all creditors in delivering comparable efforts,” Paris Club Co-Chair Thomas Revial wrote in the report, emphasizing the critical need for structural operational updates.
The push for overhaul comes despite a positive shift in global data. For the first time since 2017, a 52% majority of low-income nations are now at low or moderate risk of debt distress.
The remaining 48% of these fragile economies still face high risk or are already in default. While nations like Zambia and Ghana have finalized their restructurings, others face deep coordination bottlenecks.
Ethiopia remains trapped in a bitter standstill over its defaulted $1 billion Eurobond. Official bilateral creditors recently rejected an initial settlement, claiming private bondholders failed to accept proportionate financial losses.
Proposals to fix the system include a push by the IMF, World Bank, and Ethiopia to allow all creditor classes to negotiate terms simultaneously, bypassing the slow sequential timelines that delay recovery.
