They would also help keep debtor nations in better shape to implement difficult reforms and repay foreign loans.
The U.S. will pay the biggest political price for this lopsided approach because most of the large debtor nations are located in our hemisphere.
His attack comes amid concerns the fund's stringent austerity measures for debtor nations are doing more harm than good whilst failing to contain a crisis that is now well into its third year.
Both of those opposition parties are offering a much more conciliatory, less austere approach to European debtor nations, which would likely include Euro bonds, lower interest rates for indebted countries and lengthened repayment schedules.
Almost all Soviet Bloc borrowers already receive substantially lower interest rates and more generous terms and conditions on loans from Western banks than, for example, Latin American debtor nations, not to mention government guaranteed credits.
Risk: The precedent established by granting long-term rescheduling or forgiveness for a resource-rich nation such as Russia will be called intolerable, and sure to lead to as many as 30 other debtor nations demanding the same preferential treatment from Western creditors.
The Center for Security Policy today issued a critical appraisal of the priorities of the Group of Seven industrialized countries in placing the economic and financial needs of the Warsaw Pact countries increasingly ahead of those of the Latin American debtor nations in certain areas.
They have no reason to do otherwise insofar as the Soviets continue to withhold vital financial and economic data such as the scope of the payments crisis, the size of remaining Soviet gold reserves, and several other categories of information commonly revealed by other debtor nations.
Given the sovereign debt turmoil in the Eurozone and the approaching debt problems for the US (as the US debt-to-GDP figures escalate over 100% by mid-2012 without accounting for state unfunded pension liability), debtor nations will find it difficult to finance large-scale consumption economies any longer.
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Under the OMT, the ECB pledged to purchase government bonds of peripheral Eurozone nations in unlimited quantities on the secondary market to keep borrowing costs down, so long as the debtor nations first applied for assistance from the European Stability Mechanism (ESM) and agreed to the attendant conditions.
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In letters delivered to the finance ministers of the Group of Seven countries, the principal Latin American debtor nations, the IMF and the World Bank, the Center calls attention to the growing inequities in the industrialized West's approach to funding Mr. Gorbachev's perestroika and the financial requirements of the flegling democratic governments of Latin America.
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