The Minister for Finance will call today for a moratorium on debt repayments that are crippling some of the world's poorest countries and for greater speed and flexibility in implementing the present debt relief initiative. But Mr McCreevy will stop short of demanding the cancellation of all Third World debt when he addresses the annual meeting of the International Monetary Fund (IMF) in Prague this morning.
He will back a proposal by Canada's finance minister, Mr Paul Martin, to immediately halt interest payments on debts owed by poor countries with credible plans to reduce poverty.
If the debtor countries make good on their plans, all their debts would be forgiven but if they fail, interest charges will be reimposed and the debt will be repayable in full.
"It's not a cancellation, it's a moratorium," Mr Mc Creevy said yesterday. "I am reflecting the unease and disappointment with the Heavily Indebted Poor Countries (HIPC) initiative. It has been very, very slow and very bureaucratic. We want it to be accelerated, to be more flexible and have fewer conditions."
Ten countries have qualified for debt relief under the HIPC initiative and the IMF and World Bank predict a further 10 will be ready by the end of the year. But a series of complex conditions imposed on poor countries as part of the package have made progress painfully slow.
The Canadian initiative, which took other finance ministers from the Group of Seven (G7) leading industrialised countries by surprise, has been welcomed by some anti-debt campaigners.
In his statement to the IMF today, Mr McCreevy will reaffirm the Government's commitment to increase Ireland's contribution to UN development aid to 0.7 per cent of GNP. The Republic already spends 0.31 per cent of GNP on development aid, compared with an OECD average of around 0.24 per cent.
Calling for a more flexible application of the HIPC initiative, the Minister will ask the IMF to take account of natural disasters that have thrown some poor countries off course in implementing their development plans.
As anti-capitalist protesters surrounded the conference centre where the IMF meeting is taking place, Mr McCreevy acknowledged the widespread criticism of the rigid economic philosophy informing IMF decisions but he declined to criticise this philosophy, known by economists as the "Washington Consensus".
