The Global Sovereign Debt Monitor 2025 shows: More than half of public budgets in low- and middle-income countries are heavily or very heavily burdened by the debt service they have to pay to foreign creditors. The 4th International Conference on Financing for Development (FfD4), which will take place in Seville from June 30 to July 3, 2025, offers an opportunity to reform the debt system. Erlassjahr.de and Misereor are appealing to the new German government to support the demands from the Global South.
Previous debt restructuring mechanisms are failing
The Global Sovereign Debt Monitor 2025 takes a critical look at the experiences made in previous debt restructuring cases within and outside the G20 Common Framework. The countries affected include Sri Lanka and Suriname, whose foreign debt burden remains very high despite debt restructuring having been completed, as well as Pakistan and Kenya, which have so far avoided debt restructuring negotiations.
Debt service often exceeds spending on education and health
Over the next three years, the 47 very heavily burdened countries will have to pay an average of at least 15% of their government revenue to foreign creditors for interest and redemption payments. This massively restricts their room for maneuver in terms of fiscal policy. The global debt crisis is leading to massive human rights violations and to the Sustainable Development Goals (SDGs) not being achieved as planned.
Structural reforms are necessary
This year, for the first time, all countries worldwide were included in the analysis of the Global Sovereign Debt Monitor 2025. The resulting findings make it clear that countries in the Global South in particular are exposed to an increased risk of falling into a public external debt crisis. Although many debtor countries are focusing on national reform efforts, these alone can hardly reduce the risk of a crisis. These countries remain at a massive disadvantage, as their access to credit financing is significantly more difficult than that of countries with a higher credit rating, such as Germany. The subordinate role of their currencies in the international currency hierarchy is also a major obstacle.
2025 is a year of opportunity
The analyses of the creditor landscape in the Global Sovereign Debt Monitor 2025 clearly show that the G7 and EU countries continue to have key political and regulatory levers at their disposal to push through far-reaching debt relief and structural reforms of the international financial architecture. Politically, there is a lot at stake this year: the debt crisis and its dramatic impact on the lives of poor and marginalized people in highly indebted countries will not tolerate any further political hesitation. The 4th International Conference on Financing for Development (FfD4), which will take place in Seville from June 30 to July 3, 2025, offers a historic opportunity. The goal must be a debt architecture that is also and especially geared towards the development needs of the Global South – and is actively shaped by them.
The German government must act
Countries from the Global South – such as the African Group of States within the United Nations or the Alliance of Small Island States – have put concrete proposals on the table in the run-up to the negotiations. In the view of erlassjahr.de, it is the task of the new German government to take a clear position and take up reform proposals from the Global South in the preparations for Seville. This includes, in particular, supporting an intergovernmental process under the umbrella of the United Nations, with which a fair sovereign insolvency procedure can finally be initiated.
The Global Sovereign Debt Monitor, which is published every year by the German debt relief alliance erlassjahr.de and Misereor, analyzes the current burden of foreign debt on countries worldwide as well as Germany’s role in international debt relief policy and makes recommendations for dealing with the global debt crisis. This year, the publication of the debt report is embedded in the global civil society campaign āJubilee 2025 – Turn Debt into Hopeā www.erlassjahr2025.de.