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A debtor country comes to the Paris Club for a negotiation when an appropriate programme is supported by the IMF and shows that the country is not able to meet its debt obligations and thus needs a new payment arrangement with its external creditors.
Nineteen countries are permanent members of the Paris Club and may participate in the negotiation sessions. Other official creditors can also attend rescheduling sessions on an ad-hoc basis, subject to the agreement of permanent members and of the debtor country. Any country that has granted governmental loans or guaranteed credits by the Government or its official agencies to a debtor country which presents a request can attend a Paris Club meeting.
The outcome of the negotiation is not itself a legal agreement between the debtor and the individual creditor countries. Instead, creditor countries that participate in the negotiation sign an Agreed Minutes, which is a recommendation to their governments to sign bilateral agreements with the debtor country. These bilateral agreements give effect to the agreement reached in the negotiating session.
In these negotiations, the debtor country is usually represented by the Minister of Finance and/or the Governor of the Central Bank. Observers from the international institutions, notably the IMF, the World Bank, and the relevant regional development bank also attends the meeting. Each of them are requested to make a presentation on their views of the economic and financial situation of the debtor country concerned.
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