7 June 2016 by Eric Toussaint , Maialen Mariscal Ruben Plaza
CC - Wikimedia
According to Éric Toussaint, States should default on their payments in order to renegotiate and radically reduce their debts.
San Sebastian (Basque Country – Spain) – Éric Toussaint staunchly campaigns for the cancellation of a State’s debt every time it is shown to be illegal, illegitimate or unsustainable. This idea, something that is at the heart of his political theory, has been the subject of all the forums in which he has participated, notably the International Truth Commission that the former Greek president, Zoe Konstantopoulou, created last year. Composed of 30 experts, its purpose was to scrutinize Greece’s total debt.
Éric Toussaint is the spokesperson for the CADTM, an international network that is present in more than 30 countries, and is also the author of Bancocracy, among other books.
What is the legitimate share of the public debt of the Spanish state?
Without carrying out an audit, it is impossible to know. For this reason it seems fundamental that citizens, with the help of the International Citizen debt Audit Network (ICAN) and governments willing to bring about change at local, regional and state levels, review the process by which Spain accumulated this debt, in order to determine which shares are illegitimate, illegal and/or insupportable.
What is the difference between these terms?
By illegitimate debt, we mean a debt incurred against the public interest and in favour of the special interest of a privileged minority. An example is the debt that arose from the bail-out of the private banks which were responsible for the economic crisis. This debt was not incurred to ‘rescue’ the public. Before the banking crisis, public debt in Spain was approximately 60% of GDP
Gross Domestic Product Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another. ; today, it has reached 100% of GDP.
What about illegal debt?
This is debt accumulated illegally, as when a municipality builds infrastructure by resorting to corruption, through the overbilling of public works companies or through excessive commissions.
And unsustainable debt?
It is when local governments that are seriously indebted, following an accumulation of illegitimate and illegal debts, find themselves unable to ensure quality public services for their citizens. I do not know if there are any local governments with unsustainable debt in the Basque Autonomous Community, but there is, for example the government of Puerto Real, near Cadiz.
It has been instilled in us that public debt must be repaid. Do you agree with this?
There is no obligation to repay a public debt if it is illegal, illegitimate and unsustainable. Creditors and traditional governments affirm that a debt must always be repaid. However, it is not surprising that the people who defend this idea are those who have profited from the debt, such as Mariano Rajoy, Rodrigo Rato or even Mario Draghi, the president of the European Central Bank
The establishment which in a given State is in charge of issuing bank notes and controlling the volume of currency and credit. In France, it is the Banque de France which assumes this role under the auspices of the European Central Bank (see ECB) while in the UK it is the Bank of England.
ECB : http://www.bankofengland.co.uk/Pages/home.aspx and the former director of Goldman Sachs Europe who falsified Greece’s accounts in order to increase profits.
What happens if we do not repay public debt?
An illegal debt is void and not repaying it is a right. A recent example is that of Iceland where, in 2008, its private banks failed. The British and Dutch governments demanded that the Icelandic government pay compensation to them in the framework of a bail-out. However, under pressure from citizen protests, Iceland refused to repay a debt incurred as a result of a private banking crisis for which the government was not responsible. The situation was particularly contentious, to the point of the United Kingdom putting Iceland on its list of terrorist organisations – alongside Al Qaida-however Iceland would not be bullied. Ultimately, the United Kingdom and the Netherlands took legal action against Iceland in a court of arbitration, which three years later, ruled in the latter’s favour. This example is not widely known because big media and the creditors do not wish for such information to be widely disseminated. The example of Iceland shows that it is possible to successfully refuse to repay debt.
How can citizens get organised to ensure that their opinion counts?
This all depends on the capacities of each movement to rally a significant part of the population so that it can organise and initiate a process of debt audit. First of all, they should demand that the government give full disclosure of how the debt was accumulated; they should obtain copies of contracts and payments to creditors; and they should also implement a rigorous standard regarding the identification of what is illegitimate, illegal and/or unsustainable debt. This can be done at all levels. It was in the wake of the 15M Movement that ICAN was created with groups from different regions of Spain. Similarly, after electoral changes in May 2015, certain local governments have wanted to re-organise the audit process to include citizen participation; as is the case in Madrid, with whom I have had contact, where the local government is currently considering how to include citizen participation in order to make public policy and the contraction of debts more transparent, as well as carrying out an audit of accumulated past debt.
Is governmental cooperation necessary?
It helps, but it is not vital. We must not sit idly by if governments do not want to carry out an audit. This is just one more reason to do so, as it shows that they have something to hide. Of course, if there is a government shows the will to support the audit, that is even better.
Ultimately, what does the movement seek to do through the use of citizen audits?
Convince the majority of the population that it is necessary to take strong measures in order to suspend payments and renegotiate debts with the creditors.
What are the expected results?
One of them is decision making, and in the case where an illegitimate, illegal or unsustainable debt, or all of the above, has been identified, to ensure that it does not go unpunished. This would achieve a drastic reduction in debt, because the measures are designed to allow for a suspension of payments and thus force creditors to negotiate and make concessions. Another objective is to lobby for judicial proceedings against those responsible for illegal or illegitimate debt incurred as a result of corruption or wrongdoing, through pre-existing channels. These lawsuits could be filed against governments or corrupt officials, or even against the public works companies and banks that have profited from debt incurred as a result of official bribery and contractual quid pro quo.
Is it possible for citizens to bring legal actions?
It is the public authority that must act, but citizen monitoring and pressuring of local governments to request the indictments of those responsible are very important. Furthermore, as experience has shown, permanent procedures to allow for transparency in the debt process can be adopted which, for example, will reduce corruption and the accumulation of debt with no good reason or under unacceptable conditions.
| Key Ideas|
Eric Toussaint – POLITICAL SCIENTIST
“Governments, officials, public works companies and banks guilty of corruption and maladministration must be brought to justice.”
“No government has the obligation to pay a public debt if it is not legal, legitimate and sustainable.”
“It is not widely known, but Iceland refused to give in to the United Kingdom and the Netherlands’ blackmail, and won.’
Translated by Trommons and Vicki Briault
Original source : Deia : http://www.deia.com/2016/03/25/econ...
is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France. He is the author of Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012 (see here), etc. See his bibliography: https://en.wikipedia.org/wiki/%C3%89ric_Toussaint He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. Since the 4th April 2015 he is the scientific coordinator of the Greek Truth Commission on Public Debt.
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