Accession to Paris Club
South Korea is slated to become the 21st member of the Paris Club, a group of officials from creditor countries, two decades after its sovereign default in 1997 that followed its failure to repay debts. In other words, South Korea is about to transform itself from a debtor country in distress to a leading creditor country in the international community.
According to the South Korean government, President Park Geun-hye, who is currently staying in France, is planning to make an official declaration of South Korea’s accession to the Paris Club at her summit meeting with French President François Hollande. After the announcement, the two countries will have working-level meetings before the official signing scheduled for July 1.
The Paris Club is an informal organization that was established in 1956 for debt restructuring of Argentina, which was on the brink of a default at that time. At present, it has two members, including the United States, France and Japan. Once South Korea joins the Paris Club soon, it can discuss debt restructuring and relief of certain emerging countries with the 20 advanced economies.
“The membership in the Paris Club will not only be a great boon for the international prestige of South Korea but also be of great help with the financial risks of emerging economies mounting as of late in relation to the interest rate policy of the United States,” a South Korean government official explained.