§286cc Sustaining Economic Growth

Summary

The President must tell the Secretary of the Treasury, the Secretary of State, and other federal officials, and ask the Federal Reserve Chair, to use all proper tools to push other countries to make plans that fix balance-of-payments problems and pay back private bank debt. Those plans should protect global economic growth, world trade, jobs, banks’ long-term health, and try to avoid civil unrest in the countries that need help. The United States Executive Director at the Fund must push for Fund rules that convert short-term high-interest bank debt into longer, lower-rate debt; make sure a country’s yearly external debt payments (principal, interest, fees, etc.) are a reasonable share of its projected yearly export earnings; and require the Fund to consider how many countries need help and the overall effect on world growth, trade, exports, jobs, and banks. The U.S. Director must oppose Fund aid for any country whose annual external debt service is over 85% of its annual export earnings, unless the Treasury Secretary first gives written findings to the Senate Committees on Banking, Housing, and Urban Affairs and Foreign Relations and the House Committee on Banking, Finance and Urban Affairs showing the program meets three conditions, including debt conversion at much narrower spreads than the average spreads on bank reschedulings negotiated between August 1982 and August 1983. The Treasury Secretary can waive that rule for a sudden emergency, a one-year drop in exports that raises the ratio above 85%, or other extraordinary circumstances, if documented to those same committees.