The European Union (EU) has handed the International Monetary Fund (IMF) today the union’s contribution of €170 million ($199 million) to the Catastrophe Containment and Relief Trust (CCRT), which provides grants for debt service relief to countries hit by catastrophic events, including public health disasters such as the COVID-19 pandemic, the IMF announced on Tuesday.
“Through this contribution to the CCRT, Team Europe continues to stand in solidarity with its most vulnerable partners. In this difficult period, the resources freed up can provide social services for the most vulnerable people, such as access to essential healthcare and education for young people, including girls,” said Jutta Urpilainen, European commissioner for international partnerships.
“Team Europe’s Global Recovery Initiative is working to provide debt relief and sustainable investment for the sustainable development goals (SDGs).”
On her part, the IMF’s Managing Director Kristalina Georgieva said that the EU’s contribution is critical to help the world’s most vulnerable countries cope with the impact of the COVID-19 crisis and continue providing health care, and economic and social support for their people.
This disbursement is part of the EU’s overall contribution of €183 million ($215 million) to the CCRT, financing grants for the third tranche of CCRT debt service relief that was approved recently by the IMF´s executive board.
The EU stands ready to disburse its remaining grant contribution in support of additional debt service relief in the context of potential future CCRT tranches. With this contribution, the EU, together with its institutions and its member states, has committed more than half of the current CCRT pledges, according to the IMF.
Together with the third tranche, the IMF has provided about $736 million (€626 million) in grants for debt relief to all 29 CCRT-eligible members since the pandemic began in early 2020.
The debt relief initiative under the CCRT aims to free up resources to meet exceptional balance of payments needs created by the disaster rather than having to allocate those resources to debt service.
The CCRT provides grants to pay debt service owed to the IMF by eligible low-income member countries that are hit by the most catastrophic of natural disasters or battling public health disasters such as the COVID-19 pandemic.
CCRT-eligible countries are those eligible for concessional borrowing through the IMF's Poverty Reduction and Growth Trust and whose annual per capita gross national income level is below $1,175.