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Consider the following statements with regard to the Paris Club:
1. Its main objective is to find sustainable debt-relief solutions for countries that cannot repay their bilateral loans.
2. India is a member of this club.
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
Correct answer is option 'A'. Can you explain this answer?
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Consider the following statements with regard to the Paris Club:1. Its...
- Recent context: Paris Club likely to provide financial assurances to IMF on Sri Lanka debt.
- The Paris Club is a group of mostly western creditor countries that grew from a 1956 meeting in which Argentina agreed to meet its public creditors in Paris.
- Their objective is to find sustainable debt-relief solutions for countries that are unable to repay their bilateral loans. Hence, statement 1 is correct.
- All 22 are members of the group called Organisation for Economic Co-operation and Development (OECD).
- The members are: Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Japan, Korea, Netherlands, Norway, Russian Federation, Spain, Sweden, Switzerland, United Kingdom, United States of America.
- It operates on the principles of consensus and solidarity. Any agreement reached with the debtor country will apply equally to all its Paris Club creditors.
- A debtor country that signs an agreement with its Paris Club creditors, should not then accept from its non-Paris Club commercial and bilateral creditors such terms of treatment of its debt that are less favourable to the debtor than those agreed with the Paris Club.
- India and China are not members. India acts as an ad-hoc participant. Hence, statement 2 is not correct.
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Consider the following statements with regard to the Paris Club:1. Its...
Statement 1: Its main objective is to find sustainable debt-relief solutions for countries that cannot repay their bilateral loans.
Statement 2: India is a member of this club.
The correct answer is option 'A' - 1 only.
Explanation:
The Paris Club is an informal group of creditor countries that provides debt relief to debtor countries. Let's analyze each statement in detail:
Statement 1: Its main objective is to find sustainable debt-relief solutions for countries that cannot repay their bilateral loans.
The Paris Club was established in 1956 and comprises 22 permanent members, including major economies such as the United States, Japan, Germany, France, and the United Kingdom. The main objective of the Paris Club is to negotiate and provide debt relief to debtor countries that are facing difficulties in repaying their bilateral loans. The club aims to find sustainable and coordinated solutions in order to restore the financial stability of debtor countries. The debt relief provided by the Paris Club can include rescheduling, reduction, or cancellation of debt, depending on the financial situation and needs of the debtor country.
Statement 2: India is a member of this club.
India is not a member of the Paris Club. As of now, the club consists of 22 permanent members who are mostly developed countries. These members represent major creditor countries and have significant influence in international financial affairs. While India may have bilateral loans with some of the member countries, it does not have a seat at the Paris Club table.
In conclusion, statement 1 is correct as the main objective of the Paris Club is to find sustainable debt-relief solutions for countries that cannot repay their bilateral loans. However, statement 2 is incorrect as India is not a member of the Paris Club.
Statement 2: India is a member of this club.
The correct answer is option 'A' - 1 only.
Explanation:
The Paris Club is an informal group of creditor countries that provides debt relief to debtor countries. Let's analyze each statement in detail:
Statement 1: Its main objective is to find sustainable debt-relief solutions for countries that cannot repay their bilateral loans.
The Paris Club was established in 1956 and comprises 22 permanent members, including major economies such as the United States, Japan, Germany, France, and the United Kingdom. The main objective of the Paris Club is to negotiate and provide debt relief to debtor countries that are facing difficulties in repaying their bilateral loans. The club aims to find sustainable and coordinated solutions in order to restore the financial stability of debtor countries. The debt relief provided by the Paris Club can include rescheduling, reduction, or cancellation of debt, depending on the financial situation and needs of the debtor country.
Statement 2: India is a member of this club.
India is not a member of the Paris Club. As of now, the club consists of 22 permanent members who are mostly developed countries. These members represent major creditor countries and have significant influence in international financial affairs. While India may have bilateral loans with some of the member countries, it does not have a seat at the Paris Club table.
In conclusion, statement 1 is correct as the main objective of the Paris Club is to find sustainable debt-relief solutions for countries that cannot repay their bilateral loans. However, statement 2 is incorrect as India is not a member of the Paris Club.
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Consider the following statements with regard to the Paris Club:1. Its main objective is to find sustainable debt-relief solutions for countries that cannot repay their bilateral loans.2. India is a member of this club.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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