Ms Karol Balfe:

As regards the appetite, which links to why the EU is pushing back, among the richer countries there is limited appetite to really look at this in a transformative way. Among the global south majority there is a strong appetite to address it because they are the ones bearing the brunt of it. I think the reasons behind this are to do with self-interest of the richer countries. The debt is about 61% to private creditors, 26% to multilateral creditors and about 14% to bilateral creditors. China is playing an increasing role in this but, obviously, the IMF plays a huge role in it as well. One of the problems is that, whether it is a private creditor or sovereign debt, the IMF is always the body turned to on a one-to-one basis and the power dynamics are very skewed. The IMF typically imposes cuts on public sectors, the public sector wage bill and public services provision, which leads to austerity in those countries. That is one of the justice and fairness elements and linked to Senator Higgins's question about health and public services.

This is having a real impact on people. ActionAid did a survey of 600 public health workers across six countries in Africa, and 97% of healthcare workers said they did not have enough to meet their food, housing or living needs. We see children in classrooms of 200. We see people waiting for access to medical treatment that they just cannot get because of the public sector wage cuts and other cuts. There is, therefore, a huge moral and legal argument in respect of debt being looked at in this way. It is very much linked to climate because part of the reason countries end up in debt distress is that they have a massive climate shock or a climate impact. They bear the brunt of climate change, and that puts their economy into shock. Covid, the Ukraine war and the financial crash of 2008 all played a role as well, but it is a massive link and it is a vicious cycle whereby they are put in the debt crisis because of a climate disaster and then their response, fuelled by IMF measures, leads them to exacerbate the climate crisis. That is the vicious cycle in which they are trapped.

Even if there is no appetite, we have to push. Ireland has benefited so much from being a European country. We have among the highest emissions in Europe. We have these climate responsibilities and obligations. It is very much linked to this debt. If we were to pay the amount of climate finance that is owed to global south countries and pay the ODA we had committed to pay, countries would not be in this debt crisis either, arguably, so we have this moral responsibility and legal obligations. We have to push through. Creditors probably do not have the appetite. They are driven by their shareholders. Many organisations have asked them to cancel debt for various countries and they have declined to engage. This is where governments need to play a role. We need better corporate regulation of this. This is why we need a global governance framework. We need better accountability from corporates because otherwise we have this constant cycle of poverty, inequality and conflict that we will not get out of.