Paris Club comes under attack

For years the secretive Paris Club of sovereign creditors has ruled over debt workouts without comment or criticism. It dictated terms to the private sector and resisted, where possible, the writing off of debts to poorer nations. But that was in the days when official flows were the majority and private debt was in the hands of the banks. Now bondholders are outraged that the Paris Club is refusing to adapt its approach to the new economic environment, one in which private finance calls the shots. With the Paris Club refusing to budge on any of the major issues, the stage is set for a protracted battle. Brian Caplen reports