Committee for the Abolition of Illegitimate Debt

During the last three years Argentina has been increasingly demonstrating its goodwill Goodwill The difference between the assets on a company’s balance-sheet and the sum of its tangible and intangible assets. When one company takes control of another company, the acquiring company generally pays a price that is higher than the value of the net assets. Goodwill generally consists of intangible elements, such as brands, which are evaluated subjectively. towards Washington (especially within UNASUR), [4] major transnational corporations (like the North American company Chevron [5] or companies from other countries) [6] and its creditors (after 13 years of default Argentina resumed its payments to the Paris Club Paris Club This group of lender States was founded in 1956 and specializes in dealing with non-payment by developing countries.

in 2014, while a large part is due to countries that supported and financed its military dictatorship between 1976 and 1983). [7] Even so, Uncle Sam has humiliated Argentina and wants to show that the US judiciary can dictate terms to sovereign countries, especially in the matters of debt. This shows once more that compromising with Washington and creditors does not solve anything.
Slapped in its face, Argentina rebounded with various initiatives in the second half of 2014:

1. It announced that it has filed a complaint against the US before the International Court of Justice (ICC) in The Hague (the UN court which settles lawsuits amongst countries). This appeal will have little impact since Washington does not recognize the jurisdiction of the ICC which charged the US with mining Nicaragua’s ports in 1985. Let us remember that during the 1980s, the US government tried to overthrow Nicaragua’s progressive Sandinista regime by supporting the “contra”, an armed rebellion fighting from the border, and by mining its ports.

2. Argentina is trying hard to initiate a debate in the UN General Assembly on the need to establish a mechanism for resolving disputes between debtors and creditors. It is unlikely that the resolution of September 2014 will be implemented anytime soon. Moreover, even if such a mechanism was installed, it would most likely disregard the interests of the people and support creditors. [8]

3. On 10 September 2014, Argentina passed the “sovereign payment law” (Ley del Pago soberano). [9]With this, the Argentine Parliament extends its support towards the Argentine government’s policy of debt payment which the social movements and leftist political organizations have justifiably criticized. [10] Moreover, the law allows Argentina to stop paying from their Bank of New York Mellon account and provides for a new Argentine fund instead. With this provision, Argentina plans to prevent the New York judge from prohibiting future payments. Judge Griesa reacted by charging Argentina with contempt of court. The law also provides for a new restructuring with a new debt swap and allows creditors to choose between the judiciaries of Argentina and France for settling possible disputes (therefore, the US jurisdiction will no longer be held competent). Obviously this is not a radical change of policy since the judiciary in France is no less biased towards creditors than in the US or London. [11] The Argentine jurisdiction should have been clearly acknowledged as the only competent authority henceforth. This would have conformed to the Argentine Constitution which clearly stipulates that only Argentine judges can resolve a conflict between the country and foreign entities. [12]

The Act of 10 September 2014 established a commission for auditing the country’s debt since March 1976 [13] until 2014. Various movements working abroad on the debt-issue had come up with this progressive idea, reminiscent of Ecuador’s decision in 2007 to launch an integral debt-audit commission. It led to the suspension of paying the illegitimate portion of Ecuador’s public debt. In Argentina, the response of social movements (trade unions that are independent of the government such as the CTA, most of the organizations protesting against illegitimate debt, and the radical left) has been mixed and often negative regarding the law.

Constitution of the Assembly for the suspension of debt payments and the audit of illegitimate debt in favor of the commons.

Finally, an important platform, called the "Assembly for the suspension of debt payments and the audit of illegitimate debt in favor of the commons”, [14] was formed. Despite understandable reluctance, it called for establishing the commission mentioned in the Act of 10 September, 2014.

The Assembly for the suspension of debt-payments and the audit of illegitimate debt convened at the Argentine parliament on Tuesday, 14 October, 2014. [15] It was a public meeting of the Parliament, called by the MP Víctor De Gennaro (President of the UP party), one of the founders of the Argentine trade union confederation CTA (Argentine Workers’ Central Union, Central de Trabajadores de la Argentina). ATTAC-CADTM Argentina and Jubilee South had joined hands with the CTA so that the maximum possible number of left-minded people and associations could assemble on a transparent and radical platform regarding illegitimate debts reclaimed from Argentina. Most members of the left-wing social and political opposition to Cristina Fernández’ government were present at the meeting. The delegates were: the CTA (a large section of the national leadership was present), ATTAC-CADTM Argentina (Maria Elena Saludas and Guillermo Berganza) and Dialogo 2000-Jubilee South (Beverly Keene), two national-level members of the Left and Workers Front (FIT, an alliance of 3 Trotskyist organizations-PO, PTS and IS), Néstor Pitrola (former Piquetero leader), Pablo López (National MP elected in the province of Salta), Nobel Peace laureate Adolfo Pérez Esquivel, Nora Cortiñas representing the Mothers of the Plaza de Mayo (the CADTM knows her well since she has often participated in its activities: Nora is also a member of Jubilee South), Angel Furlan (Lutheran Church) [16]., former ambassador Miguel Ángel Espeche Gil, MPs from Buenos Aires-Gustavo Vera and Pablo Bergel, Julio Gambina (Director of IEF –CTA, the Institute of Research and Training and a member of ATTAC-CADTM), Gustavo Giménez (MST), Moira Millán (national coordinator for the first March of the Women of native peoples), Beatriz Rasland (FISYP), Camilo Rodriguez (National Forum against debt), Ricardo Godoy (PTP-PCR), Susana Merino (editor, El Grano de arena), Luis Laferrere (Programa Por una Nueva Economía), Ana Rameri (IPyPP), Guillermo López (FETERA-CTA), Carlos Loza (Association of former detained-disappeared people), Eduardo Lucita and Jorge Marchini (EDI - Economists on the left, an organization with which CADTM works closely: in 2005 the two organizations co-founded the International Debt Observatory: http://www.oid-ido.org/), Cayetano Masaglia (Proyecto Sur), Pablo Cabeza (Centro Cultural Alejandro Olmos), José Quarrachino, Adrián Ruiz (Director of Human Rights, CTA), Manuel Marta (Movimiento Emancipador) and Daniel Suárez (PSA). Altogether, a little over eighty delegates attended this meeting.

I was invited to deliver a keynote speech on my views of the challenges against illegitimate debt. In twelve minutes, I outlined the major orientations of the CADTM (watch the video of a part of my presentation in Spanish: https://www.youtube.com/watch?v=GJnJ-WdPPOA): a citizen audit is required to identify the illegitimate and / or illegal portion of the debt; if a parliamentary committee is set up in keeping with the Act of 10 September 2014 it must actively involve the maximum possible number of social organizations and citizens in its activities; sufficient time should be allotted to the audit commission for a full investigation of the debt; the audit must be comprehensive, it must take into account the social and environmental impact of the debt policy; reliance on a multilateral mechanism for settling disputes among creditors and debtors would entail self-deception; as a nation, Argentina must be determined to challenge its creditors and take a unilateral sovereign action of suspension of payment, hold an audit and then repudiate the part identified as illegitimate and / or illegal; examples from Argentina (2001-2005), Ecuador (2007-2009) and Iceland since 2008 show that a country can pull off significant concessions from its creditors by a unilateral act. [17]

The 80 delegates meeting on the 14 October 2014 issued a clear statement (see http://cadtm.org/PATRIA-O-DEUDA-El-unico-acreedor) that is exactly on the lines the CADTM and Dialogo 2000-Jubilee South/Americas stand up for. Over the years I have been visiting Argentina and meeting the people of this country’s social movements and the left-wing, this has been the biggest activity I ever participated in, in terms of representation and more importantly, resistance to debt. [18]

I must also mention here that the two MPs present at the meeting from the Workers’ Party - FIT (Left and Workers Front) informed the gathering that they had tabled a bill for holding a binding referendum on the debt-issue. Article 2 of the Act contains the question that these two MPs propose to ask all Argentine citizens:

"Do you support the suspension of the Argentine debt-repayment until a comprehensive audit runs its full course and identifies the factors detrimental to the interests of the people and the nation?” [19] The question is very clear. If it was put to Argentine citizens, it would definitely garner a largescale positive response. Unfortunately, there is very little chance of convincing the current Parliament to pass this bill and hold such a binding referendum.
So the idea of an unofficial, alternative referendum has surfaced from the social movements. I will come back to it later.

The week of 13-18 October 2014 was particularly busy and full of promising activities. The media coverage of the events organized and of the ideas they stirred was significant from the start. On Sunday, 12 October, Tiempo Argentino, a leading Argentine newspaper, close to the ruling party, published my full-page interview on the conflict between the judiciaries of the US and Argentina, titled “vulture funds Vulture funds
Vulture fund Investment funds who buy, on the secondary markets and at a significant discount, bonds once emitted by countries that are having repayment difficulties, from investors who prefer to cut their losses and take what price they can get in order to unload the risk from their books. The Vulture Funds then pursue the issuing country for the full amount of the debt they have purchased, not hesitating to seek decisions before, usually, British or US courts where the law is favourable to creditors. are the vanguard of the US foreign policy” (see: http://tiempo.infonews.com/nota/134949/los-buitres-son-la-vanguardia-de-la-politica-exterior-de-ee-uu and http://cadtm.org/Los-buitres-son-la-vanguardia-de). This followed an interview published five weeks earlier in Página 12, an Argentine newspaper also close to the ruling party, titled: “Vulture funds are the vanguard” (see: http://cadtm.org/Vulture-funds-are-the-vanguard. The original version in Spanish was published on Sunday, 28 September 2014: http://www.pagina12.com.ar/diario/elpais/1-256349-2014-09 -28.html). [20] This newspaper had announced my visit, so had the Latin American television channel Telesur (see https://www.youtube.com/watch?v=1i3knxnJElc telecast on 29 September 2014). In the morning of Monday 13 October, I was interviewed live by Alejandro Bercovich, a journalist for Rock and Pop, a prominent radio station, where he works for the program called Tierra de Locos (Madmen’s land). [21] I explained why a unilateral sovereign act of Argentina, together with auditing and challenging the payment of illegitimate debt, was the best way to counter vulture funds and other creditors.

On 14 October, around noon, I gave a long interview to Buenos Aires Herald, the English-language daily of Buenos Aires. [22] This full-page interview was published on Sunday 19 October (see http://cadtm.org/Argentina-must-audit-the-debt and http://www.buenosairesherald.com/article/172508/%E2%80%98argentina-must-audit-the-debt-taken-between-1976-and-2013%E2%80%99). At around 6 pm, I was interviewed for a video documentary of the CTA. Also on 14 October at 10 pm, I was one of the guests of Minuto Uno, a TV program telecast by the private cable channel Canal 5 Noticias (Channel 5 News or C5N) [23] anchored by Gustavo Silvestre. This programme is telecast live from Monday to Friday and has quite a large audience-base as it focuses on the clash of different perspectives and investigates scandals. This is the kind of programmes I thoroughly dislike as they highlight only spectacular aspects without exploring political issues. I explained why it was necessary to challenge debt-payments beyond the conflict with vulture funds. I emphasized that a comprehensive debt-audit, with active citizen participation, was essential.

A public meeting on the audit commission convened by ruling party MPs at the Argentine Parliament.

On Wednesday 15 October 2014, after giving a long interview to the journalist Natalia Aruguete of the Argentine daily Pagina 12 [24], I was again invited to the Argentine Parliament to deliver a keynote speech at a meeting called by two ruling party MPs (Carlos Raimundi and Héctor Recalde). They had voted in favor of the sovereign payment law (of 10 September 2014) and wanted the debt-audit commission to be actually implemented. That is why they called this public meeting within the Parliament premises. The President of the Chamber, Julián Domínguez, had been hospitalized and was represented by one of his advisers, lawyer Eduardo Barcesat (specializing in litigations between Argentina and foreign companies handled by ICSID ICSID The International Centre for the Settlement of Investment Disputes (ICSID) is a World Bank arbitration mechanism for resolving disputes that may arise between States and foreign investors. It was established in 1965 when the Washington Convention of that year entered into force.

Contrary to some opinions defending the fact that ICSID mechanism has been widely accepted in the American hemisphere, many States in the region continue to keep their distance: Canada, Cuba, Mexico and Dominican Republic are not party to the Convention. In the case of Mexico, this attitude is rated by specialists as “wise and rebellious”. We must also recall that the following Caribbean States remain outside the ICSID jurisdiction: Antigua and Barbuda, Belize, Dominica (Commonwealth of) and Suriname. In South America, Brazil has not ratified (or even signed) the ICSID convention and the 6^th most powerful world economy seems to show no special interest in doing so.

In the case of Costa Rica, access to ICSID system is extremely interesting: Costa Rica signed the ICSID Convention in September, 1981 but didn’t ratify it until 12 years later, in 1993. We read in a memorandum of GCAB (Global Committee of Argentina Bondholders) that Costa Rica`s decision resulted from direct United States pressure due to the Santa Elena expropriation case, which was decided in 2000 :
"In the 1990s, following the expropriation of property owned allegedly by an American investor, Costa Rica refused to submit the dispute to ICSID arbitration. The American investor invoked the Helms Amendment and delayed a $ 175 million loan from the Inter-American Development Bank to Costa Rica. Costa Rica consented to the ICSID proceedings, and the American investor ultimately recovered U.S. $ 16 million”.

https://icsid.worldbank.org/apps/ICSIDWEB/Pages/default.aspx , the World Bank World Bank
WB The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

’s “court”). He highlighted “Argentina’s war with vulture funds” and stressed the need to challenge the debt both from legal and constitutional viewpoints by defining the debt as mostly illegitimate because of its origin under the military dictatorship (1976-1983) and its further development. Mr. Barcesat also said that it was necessary to identify and prosecute those responsible for the illegitimate debt. Then, the organizers invited me to deliver a keynote speech on my view on and recommendations for the debt-audit commission’s activities. [25] Nearly a hundred people were present. The state-owned TV channel Canal 7, the official news agency Telam, the National Public Radio, a major private radio and the Latin American TV channel Telesur took interviews. I repeated roughly what I had said the previous day regarding the suspension of debt payments. [26] Actually, the parliamentarians who had invited me would have preferred it if I had had a different story to tell: a discourse supporting the government. My emphasis on the need to audit the entire process of debt until today, which would include both the restructuring programs carried out in 2005 and 2010 under the present ruling party, was not quite welcome though this is what is said in the law. Felisa Micheli, the former finance minister who was in office when the suspension of payment ended (it lasted from late December 2001 to March 2005) and a debt restructuring took place (in 2005), intervened to say that it was impossible to do any better than what was done between 2005 and 2010.

Hector Recalde (MP), Fernanda Vallejos (Eonomist), Eric Toussaint (CADTM) and Carlos Raimundi (MP), 15 October 2014 at the Argentine parliament

Though I insisted that the audit should involve active citizen participation and that, to this end, the confidentiality requirements stipulated by the law should be bypassed; it probably did not convince the supporters of the government. I also stressed the need to conduct the audit in an integral manner, i.e by considering the social and environmental impacts of the debt. I said that the CADTM international network was ready to accept any invitation from the commission, in case it was formed. The CADTM is willing to shore up Argentina’s debt-audit, armed with all its experience.

The media coverage of my speech at this event convened by the ruling party MPs was impressive: a long interview aired live on the National Public Radio (http://cadtm.org/Es-posible-desobedecer-a-los); repeat broadcasts on around 20 radio stations throughout the country and on various internet sites; a dispatch from TELAM, the official news agency (http://cadtm.org/Eric-Toussaint-La-deuda-argentina); a major private radio station having tie-ups with the newspaper Tiempo Argentino, TeleSUR, etc.

It’s worth mentioning here that five or six experts were present who, for the past 15 years, have been involved with a debt-audit under three ongoing legal proceedings. Three of them said that they were willing to lend their active support to the parliamentary audit commission when it takes off.

A meeting with the leadership of the Confederation of Argentine Workers (CTA) to propose plans for a public referendum for the suspension of debt payments

On Thursday 16 October 2014, the CTA leadership invited me to discuss the strategy for strengthening the movement for suspending debt-payment and auditing illegitimate debt. [27] I stressed the importance of citizens’ participation in the parliamentary debt-audit commission which must take off now. The success of the meeting held two days back was hailed and the evolution of the international and national situation on debt analyzed. Then the discussion zeroed in on the possibility of a referendum for suspending the payment of illegitimate debt by end-2015.

A meeting with the leadership of the Confederation of Argentine Workers (CTA) regarding proposals for a public referendum for the suspension of debt payments

It should be known that the CTA conducted two major referendums during the 2000s: one in 2000-2001 (when the economic crisis led to the popular uprising in December 2001 and the pre-revolutionary situation of 2002) on the issue of fighting poverty; the other in 2004-2005 on rejecting the FTAA, the US project to establish a free trade area for the Americas. These two popular referendums mobilized millions of Argentines.

Eric Toussaint (CADTM), Pablo Micheli (CTA General Secretary), Ricardo Peidro and José Rigane (CTA Deputy General Secretaries)

I suggested a referendum on debt in 2015 to the CTA leadership. Pablo Michelli, its main leader, responded positively. We discussed the possibility of a major campaign for a referendum between April-October 2015, starting with a major international conference. The referendum could be held on the day of the presidential elections in October 2015. Thousands of trade-union members and activists from the CTA must participate in an extensive programme of awareness-building and mobilization so that such a campaign can take shape. Of course, all forces involved with the Assembly for the suspension of debt payments and the audit of illegitimate debt in favor of the commons must agree to join hands. If the CTA and other organizations of the Assembly confirm in the coming months that they are willing to hold such a referendum, the CADTM International Network will contribute its support.

Successful seminars on Critical Economics at the University of La Plata, 16-18 October 2014

On Friday 17 October 2014, after giving an interview to a Télam radio station, I took a bus to La Plata (about 80 kms from Buenos Aires) along with Claudio Katz (Member of EDI- Economists on the left, and author of Sous l’empire du capital: l’impérialisme aujourd’hui, a French publication (2014) from M, Quebec. [28] The organizers of the Critical Economics seminars had invited me to deliver a lecture on “Global Crisis, new international financial architecture and prospects for the peripheral countries,” in collaboration with Gérard Duménil (France), Marcelo Carcanholo (Brazil) and Javier Montoro (Spain). We had a packed audience: more than 300 young people had come to listen. [29] In all, more than 1,000 young people participated during the three days of seminars on Critical Economics. During my speech, I outlined the development of the international crisis, the efforts to build a Bank of the South, the current debt crisis and its alternatives. As for the audience reaction, it was clear that they (mostly students of Economics) were looking for radical proposals.

Saturday 18 October 2014: still more interviews and a lecture

After giving a live interview to Argentina’s National Public Radio, I went to the state-owned TV channel Canal 7 to participate in Argentina’s most-watched television program on international politics (at least 4 million viewers) called Vision 7 International. Every Saturday this outstanding programme is telecast live between 12.30-2 pm. I was interviewed for about 12 minutes on the issue of “Sovereign Debt Sovereign debt Government debts or debts guaranteed by the government. and Speculative Capitalism” (watch video in Spanish: http://cadtm.org/Deudas-soberanas-y-capitalismo). Pedro Brieger and Raul Dellatorre - two of the show’s three hosts - took the interview. Here also I elaborated on CADTM’s proposals for countering the debt-crisis by disobeying creditors, holding a comprehensive debt-audit and thereafter suspending the payment. Then I went on to deliver a speech on the international situation to a group of young people gathered in an alternative café (these youngsters were members of three small organizations of the radical left: El Zurco, Democracia Socialista and Caldera). Late Saturday afternoon, I gave a 15 minute-long interview to Barricada TV, a community-oriented alternative television channel, for a programme called “Miserias de la economia” broadcast every Wednesday, with Eduardo Lucita (Member of EDI-Economists on the Left) as anchor. On Monday 20 October, I gave an extensive interview to the CTA’s monthly bulletin before leaving for Europe.

Future prospects

As a result of Thomas Griesa’s ruling, also upheld by the US Supreme Court, the debt-issue has been central to Argentine politics since the months of June/July 2014. The government refuses to pay the sum to vulture funds in accordance with judge Griesa’s directives. 1 January 2015 will be an important milestone: if the government abides by Griesa’s order, it might open the door to other creditors claimimg similar payouts (this is known as the ‘Rights Upon Future Offers’ or RUFO clause in the jargon of Argentine politics).

How will the Argentine government act when 2015 rolls in? Will it pay the vulture funds and make a deal? It is possible. I would even say that it is likely. Several recent statements from Argentine politicians point in this direction. The Presidential elections will be held in October 2015. Therefore, President Cristina Fernández is likely to reassure that she has solved the disputes with the creditors and has brought the debt problem under control. In that case, the debt issue will be sidelined for the moment.

Economic conditions will possibly deteriorate if the prices of raw materials exported by Argentina (transgenic soybean and mining products) fell sharply, leading to a plunge in tax revenues and an increase in the cost of debt refinancing Debt refinancing Taking out new loans to reimburse current debts. . This should be kept in mind.

As for social organizations and left-wing opposition parties, it remains to be seen whether they continue to perceive debt as a pivotal theme. If this is the case, the CTA and the ‘Assembly for the suspension of debt payments and the audit of illegitimate debt in favor of the commons’ will probably choose to organize a largescale public referendum for the audit and the non-payment of illegitimate debt. In any case, the CADTM will support all struggles for a socially just solution against the burden of the debt system.
For other articles on Argentina and the debt crisis published by the CADTM, See for more

Translated by Suchandra De Sarkar in collaboration with Christine Pagnoulle.