UK government launches group to tackle sovereign debt in developing economies
LONDON, June 24 (Reuters) - The British government has created a coalition to bring together the private sector and government to help developing countries make their sovereign debt more sustainable and continue to access private investment.
A wave of sovereign debt defaults following the Covid-19 pandemic, and a global interest rate hiking cycle, have largely crested, but dozens of countries are still grappling with precarious debt repayment costs.
London and New York are the legal location for the bulk of the world's bond lending to sovereign states, and most bonds to African governments are domiciled in London.
Key priorities of the London Coalition on Sustainable Sovereign Debt will include making debt contracts clearer and more transparent, improving the way loan terms address natural disasters, and addressing problems with group lending practices, the UK Treasury said in a statement on Monday.
It also said that encouraging fair and open debt restructuring, and "more resilient borrowing practices", would help expand potential markets for the UK and improve security.
The new group will be co-chaired by Emma Reynolds, economic secretary to the Treasury, and Jose Vinals, a banker and economist who was most recently the chairman of Standard Chartered (STAN.L), opens new tab.
The grouping was launched just a week before the United Nations Financing for Development conference, a once-in-a-decade event which kicks off in the Spanish city of Seville on June 30. The launch also comes amid historic cuts to aid and concessional finance from wealthy nations, including the UK and the United States.
Among measures suggested in a recent Vatican-backed report on financial reform were legal changes in London and New York that would prevent lenders from slowing down debt restructuring negotiations when countries default. Neither jurisdiction has so far adopted the measure.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
27 minutes ago
- Reuters
UK to purchase fighter jets capable of carrying tactical nuclear weapons
THE HAGUE, June 24 (Reuters) - The British government said on Tuesday that it would purchase a dozen F-35A fighter jets capable of firing tactical nuclear weapons in what it described as the biggest expansion of its nuclear deterrent in a generation. The purchase of the Lockheed Martin jets would allow Britain's air force to carry nuclear weapons for the first time since the end of the Cold War, Downing Street said. "In an era of radical uncertainty we can no longer take peace for granted, which is why my government is investing in our national security," Prime Minister Keir Starmer said in a statement. Britain is increasing defence spending and upgrading its military forces, including its submarine fleet, as it faces increasing hostility from Russia and as the United States retrenches from its traditional role as a defender of European security. The British government said the purchase of the jets would allow it to contribute so-called dual-capable aircraft to NATO to carry nuclear weapons in the event of a conflict. NATO Secretary General Mark Rutte said "this is yet another robust British contribution to NATO". Britain's nuclear deterrent currently rests solely on the Trident submarine-based system, which misfired during a test last year, the second successive test failure after one veered off course in 2016. The last time Britain possessed an independent air-launched nuclear capability was in 1998 when the WE-177 free fall bomb, opens new tab was withdrawn from service, according to Britain's parliament. Tactical nuclear weapons are intended for battlefield use, as opposed to strategic weapons designed to be fired across vast distances. By purchasing the F-35A fighter jets, Britain would be able to diversify its military options and align more closely with NATO allies such as France, and the United States, which maintains land, sea, and air-based nuclear capabilities. The F-35A fighter jets are capable of carrying U.S. B61 tactical nuclear weapons. Britain would likely need the United States to supply those weapons for use on the planes, said one British official who declined to be named. The United States withdrew its last nuclear weapons from Britain in 2008, in a sign at that time that the threat of conflict following the end of the Cold War was receding. Downing Street said buying the new jets would support about 20,000 jobs in Britain and underline its commitment to NATO. The government has pledged to boost overall defence and security spending to 5% of economic output by 2035 to meet a NATO target and said on Tuesday it must "actively prepare" for war at home for the first time in years.
The Herald Scotland
29 minutes ago
- The Herald Scotland
PM to announce ‘biggest strengthening of UK nuclear posture in a generation'
The jets, a variant of the F35Bs the UK already uses, can carry conventional weapons, but can also be equipped with nuclear bombs. Sir Keir said: 'In an era of radical uncertainty we can no longer take peace for granted, which is why my government is investing in our national security, ensuring our armed forces have the equipment they need and communities up and down the country reap the benefits from our defence dividend.' The decision represents a victory for the Royal Air Force, which has long pushed for a return of its nuclear capabilities since the last British air-dropped nuclear weapon was withdrawn from service after the end of the Cold War. Sir Keir Starmer has travelled to The Hague for a Nato conference, where leaders are expected to commit to spending 5% of GDP on defence and security. (Ben Stansall/PA) Since then, the UK's nuclear deterrent has been carried exclusively by the Royal Navy's submarines, which the Government has also promised to invest in renewing with four new vessels. Sir Keir added: 'Supporting 100 businesses across the country and more than 20,000 jobs, these F35 dual capable aircraft will herald a new era for our world-leading Royal Air Force and deter hostile threats that threaten the UK and our Allies.' Defence Secretary John Healey said the decision followed a strategic defence review that 'confirmed we face new nuclear risks, with other states increasing, modernising and diversifying their nuclear arsenals'. The review, published earlier this month, recommended beginning discussions with the US and Nato on 'enhanced UK participation' in the alliance's nuclear mission, and raised the possibility of acquiring F35As. Nato's nuclear mission involves allied aircraft being equipped with American B61 bombs stockpiled in Europe. Nato secretary general Mark Rutte welcomed the announcement as 'yet another robust contribution' from the UK to the alliance. (Jordan Pettitt/PA) Seven nations currently contribute so-called 'dual capability aircraft' to Nato's nuclear mission, but a the use of nuclear weapons would require the authorisation of the alliance's nuclear planning group as well as the US president and British prime minister. The alliance's secretary-general Mark Rutte welcomed the announcement, saying it was 'yet another robust British contribution to Nato'. Alongside the nuclear announcement, the UK is set to provide 350 air defence missiles to Ukraine as Sir Keir and Mr Healey push for Nato to provide Kyiv with further support. The delivery will be funded by £70 million raised from the interest on seized Russian assets. Sir Keir said: 'Russia, not Ukraine, should pay the price for Putin's barbaric and illegal war, so it is only right we use the proceeds from seized Russian assets to ensure Ukraine has the air defence it needs.' Wednesday is also expected to see Nato allies formally sign up to a target of spending 5% of the GDP on defence and security. The figure includes 3.5% on 'core' defence spending, with another 1.5% being spent on wider security and resilience measures such as critical infrastructure, border security and intelligence. On Tuesday, the UK committed to reaching the new 5% target from 2035, but the Prime Minister declined to say how the Government would pay for the increase from its current target of spending 2.5% of GDP on defence from 2027.
The National
4 hours ago
- The National
UK seeks ‘trade and investment relationship' with China despite spying risk
Ministers promised 'greater robustness and consistency' in the way the UK deals with China but acknowledged the desire for a 'trade and investment relationship' with the world's second biggest economy. The 'China audit', which examined the extent of the UK's relationship with Beijing, recommended increasing the Government's ability to engage with the Asian economic superpower while increasing 'resilience' against the risks posed by Xi Jinping's country. Foreign Secretary David Lammy said 'we understand that China is a sophisticated and persistent threat' – an apparent shift from the Government's previous description of it being a 'challenge'. But he told MPs that in the past decade China has delivered a third of global economic growth, becoming the world's second largest economy and, together with Hong Kong, the UK's third largest trading partner. 'Not engaging with China is therefore no choice at all,' he said. 'China's power is an inescapable fact.' Mr Lammy said the audit painted a 'complex picture' but 'the UK's approach to China will be founded on progressive realism, taking the world as it is, not as we wish it to be'. 'Like our closest allies, we will co-operate where we can and we will challenge where we must,' he said, vowing that meant 'never compromising on our national security'. He said the Government was investing £600 million in the intelligence services following the audit and also taking measures to improve expertise about China in the civil service. A summary of the audit's findings – including guidance for colleges and universities which rely on Chinese students and partnerships for vital funding – were laid out in the national security strategy. 'The challenge of competition from China – which ranges from military modernisation to an assertion of state power that encompasses economic, industrial, science and technology policy – has potentially huge consequences for the lives of British citizens,' the strategy said. The audit underlined the need for 'direct and high-level engagement and pragmatic cooperation where it is in our national interest', signalling further high-level talks with Beijing. 'In a more volatile world, we need to reduce the risks of misunderstanding and poor communication that have characterised the relationship in recent years,' the strategy said. 'China's global role makes it increasingly consequential in tackling the biggest global challenges, from climate change to global health to financial stability. 'We will seek a trade and investment relationship that supports secure and resilient growth and boosts the UK economy.' But the strategy acknowledged 'several major areas, such as human rights and cyber security, where there are stark differences and where continued tension is likely'. The report noted: 'Instances of China's espionage, interference in our democracy and the undermining of our economic security have increased in recent years. 'Our national security response will therefore continue to be threat-driven, bolstering our defences and responding with strong counter-measures. 'We will continue to protect the Hong Kong community in the UK and others from transnational repression.' The China audit recommended 'an increase in China capabilities across the national security system'. 'That includes creating the basis for a reciprocal and balanced economic relationship, by providing guidance to those in the private or higher education sectors for which China is an important partner,' the strategy said. Shadow foreign secretary Dame Priti Patel said the Government 'has gone cap in hand to China to bail out its terrible handling of the British economy'. She claimed 'the Government has constantly and suspiciously backed the application for this new China 'super-embassy' in London' rather than listening to concerns about security. A final decision on the embassy, planned for Royal Mint Court in London will be taken by Deputy Prime Minister Angela Rayner's department. 🚨Statement from Chairman @RepMoolenaar & Ranking Member @CongressmanRaja on the CCP's proposed 'mega-embassy' in London: 'We have yet to receive credible assurances that the risks posed by the PRC's so-called mega-embassy in London can be sufficiently mitigated. The proposed… — Select Committee on the Chinese Communist Party (@committeeonccp) June 24, 2025 In the latest sign of pressure from Washington over the plans, the select committee on the Chinese Communist Party's chairman John Moolenaar and ranking member Raja Krishnamoorthi warned the embassy could pose a risk to the Five Eyes intelligence alliance, which includes the UK and US. They said: 'We have yet to receive credible assurances that the risks posed by the PRC's so-called mega-embassy in London can be sufficiently mitigated. 'The proposed structure's size and proximity to sensitive communication cables and financial centres could pose an unacceptable intelligence threat not only for Londoners, but for the UK, Five Eyes, and Europe as a whole.'
