Paris summit seeks pact to repair broken global financial system

French President Emmanuel Macron will host world leaders in Paris this week for a summit to overhaul a global financial system dating back 80 years so the world is better able to respond to climate change and future pandemics. 

Campaigners call for equitable climate finance for developing nations at the Cop27 conference in Egypt on 16 November, 2022. © Amanda Morrow/RFI

No formal decisions will be taken at Summit for a New Global Financial Pact, on 22 and 23 June, which is instead seeking to build momentum for reforming lending mechanisms so poorer nations can access urgent financing to address their most urgent needs.

Priority areas are quickening their transition to clean energy, and strengthen resilience against natural disasters.

Experts say the existing global financial system in general is preventing the world from responding to unprecedented challenges with the urgency and scale needed.

The combined fallout from Covid-19, Russia’s war on Ukraine and the ever-worsening impacts of climate change have put countries under increasing pressure.

Debt distress

More than half of the world’s low-income countries are at high risk of debt distress or are already in it, and several have defaulted.

No nations have so far received substantial relief under the G20 Common Framework – a plan intended to ease the burden on countries pushed into financial trouble by the Covid pandemic by helping them restructure their debt obligations. 

The Elysée Palace said the summit’s overarching aim was to ensure no country has to choose between fighting poverty and acting for the climate and nature.

On the wider agenda is the “fight against climate change, the preservation of biodiversity and contributing to the resolution of international crises", the Elysée added.

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Issues to be tackled include reforming multilateral development institutions like the World Bank, addressing debt overhangs, financing green infrastructure, and improving financing for countries vulnerable to climate change.

France is also drumming up support for a global levy on greenhouse gas emissions from the shipping industry.

The two-day event will be attended by heads of state from wealthy and poorer nations, senior government figures, as well as the chiefs of the World Bank and the International Monetary Fund.