By Jérôme Sgard, Sciences Po/CERI

By Paola Subacchi and Paul van den Noord.

By Sean Hagan.

By Jean-Pierre Landau.

by Jean-Pierre Landau.

At the recent COP 27 in Sharm El Sheikh, climate negotiations have mainly focused on the “finance” dimension. From the perspective of the Global South, rich countries have thus far not delivered on the funding promises made to poor countries. This raises three sets of issues for international cooperation: fairness, efficiency, as well as solidarity and development.

Current geopolitical tensions are spilling over to sovereign debt markets. They raise questions related to technical defaults, willingness versus ability to pay, or currency denomination. At the same time, they sparked renewed interest in research pertaining to the access of despotic regimes to debt markets, specifically the concept known as “odious debt”. This underpins the idea that sovereign debt, more than any other financial instrument, is intertwined with political and moral considerations.

Following the invasion of Ukraine, financial sanctions were taken against Russia. For the first time in modern times, those sanctions included the freezing of foreign exchange reserves. This Policy Brief discusses the potential consequences on the international monetary and financial system.

Emerging economies will be confronted in 2022 to a very demanding global environment and numerous policy challenges. For them, like for advanced Economies, the COVID-19 crisis has left a legacy of increased public debt and reduced fiscal space. Just as advanced economies, they will face inflation pressures coming from supply bottlenecks, as well as rising commodity and energy price. All these factors will be amplified by the consequences of the Ukraine invasion and subsequent sanctions imposed by western powers on Russia. In addition, they may face specific headwinds and constraints on capital flows, debt, and exchange rate management.