The Debt Report 2025 published today shows: The global debt crisis also has its causes in the unjust international financial system. Misereor and erlassjahr.de are therefore calling for comprehensive reforms this year.
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. "In at least 47 of the 198 countries analysed, we have to assume that human rights are being violated due to the high debt burden," explains Malina Stutz, Policy Officer at the German debt relief alliance erlassjahr.de. The countries affected include countries such as Pakistan and Kenya, which have so far avoided debt rescheduling negotiations, as well as Sri Lanka and Suriname, whose foreign debt burden remains very high despite debt rescheduling having been completed. A further 28 countries are heavily burdened; in 13 countries there is a latent burden risk.
Debt servicing often exceeds expenditure 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 per cent of their government revenue to foreign creditors for interest and redemption payments. "This massively restricts their room for manoeuvre in terms of fiscal policy," says Klaus Schilder, describing the consequences. The development finance expert at Misereor explains: "Around 231 million people in these countries are affected by extreme poverty. That's around 18 per cent of the population, which is twice as many as the global average. That is a real indictment of poverty in the 21st century."
This year, for the first time, all countries worldwide were included in the analysis of the debt report. The results clearly show 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," criticises Stutz. The countries are still at a massive disadvantage, as their access to credit financing is significantly more difficult than 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," explains Stutz. "In order to create permanently effective solutions, we therefore need far-reaching reforms to the international financial architecture."
2025 is the year to set the course
"This year in particular offers unique opportunities to overcome the global debt crisis," emphasises Klaus Schilder. A key moment is the 4th International Conference on Financing for Development (FfD4), which will take place in Seville from 30 June to 3 July 2025. "The new German government must now position itself clearly and take up reform proposals from the Global South in the preparations for Seville. In particular, this includes supporting an intergovernmental process under the umbrella of the United Nations that can finally get a fair sovereign insolvency procedure off the ground," demand Schilder and Stutz.
The Debt Report, which is published every year by the German debt relief alliance erlassjahr.de and Misereor, analyses 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 "Cancellation Year 2025 - Turn Debt into Hope" www.erlassjahr2025.de.
