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The Paris Club meets only debtors that:
- need debt relief. Debtor countries are expected to provide a precise description of their economic and financial situation and
- have implemented and are committed to implement reforms to restore their economic and financial situation.
This means in practice that the country must have a current program with the IMF supported by a conditional arrangement (Stand-by, Extended Fund Facility, Poverty Reduction and Growth Facility). The level of the debt treatment is based on the financing gap identified in the IMF program.
In case of flow treatment, the consolidation period follows the period when the IMF arrangement shows a need for debt relief. When the flow treatment extends over a long period of time (generally more than one year), the Paris Club agreement is divided into phases. The amounts falling due during the first phase are rescheduled as soon as the agreement enters into force. Subsequent phases are implemented following completion of a condition mentioned in the Agreed Minutes, which is usually the non-accumulation of arrears and the approval of an IMF review.
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