Our AAA : Audit, Action, Abolition

4 February 2012 by Eric Toussaint , Damien Millet

AAA… three letters that ring like a sardonic laugh denoting the top credit rating given by the ratings agencies. A company or a State with an AAA rating is considered credit-worthy by lenders and speculators and can borrow at more favourable rates. But to obtain – or maintain – this symbolic grade, European governments will go to any lengths, including the application of austerity policies that place their economies under the diktat of creditors. The AAA is a front that conceals social regression on a grand scale, human rights violations, and blood, sweat and tears for the most vulnerable citizens.

AAA… Three letters that ring like the laugh of the hyena as creditors reap profits while people’s rights are sacrificed with the active complicity of the heads of European States, the European Commission, the International Monetary Fund IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

and the European Central Bank 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
. Lenders and speculators have taken the most reckless risks, convinced that the public authorities would bail them out in time of crisis. Up to now they have been right. Bank bailouts have been organised, States have provided guarantees Guarantees Acts that provide a creditor with security in complement to the debtor’s commitment. A distinction is made between real guarantees (lien, pledge, mortgage, prior charge) and personal guarantees (surety, aval, letter of intent, independent guarantee). amounting to thousands of billions of euros, the wishes of creditors have been pandered to. States have spent colossal sums to bail out banks before imposing massive austerity measures which the people often oppose with determination. Street protests, general strikes, the Outraged (Indigné) movement and social struggles are reasons for hope if they can succeed in federating at European level. It is time for peoples of Europe to unite.

For three decades, neo-liberal policies have raised indebtedness to an intolerable level for the middle and lower-middle classes who largely carry the burden of repayment. The public debt of European countries has two main causes: on the one hand, the fiscal counter-revolution starting in the 1980s that favoured the richest, and on the other hand, the responses of States to the present crisis brought about by unbridled investments by bankers and hedge funds Hedge funds Unlisted investment funds that exist for purposes of speculation and that seek high returns, make liberal use of derivatives, especially options, and frequently make use of leverage. The main hedge funds are independent of banks, although banks frequently have their own hedge funds. Hedge funds come under the category of shadow banking. . Financial deregulation has removed essential safeguards and enabled the creation of increasingly complex products, leading to serious excesses and a global economic and financial crisis.

The present policies protect those responsible for the crisis and oblige the victims – in other words the people – to pay the cost. For this reason the debt is largely an illegitimate one. As long as the current logic persists, the diktats of creditors will bring constant social regression. A citizens’ audit of the public debt, together with a penalty-free moratorium on repayments, is the only solution for determining the illegitimate, or even odious, part of the debt. This part must then be unconditionally abolished. And for this illegitimate debt to be Abolished, the people must continue to mobilise and by their concerted Action impose a different policy that finally respects fundamental and environmental rights.

This Action must be the way to building a Europe based on solidarity and co-operation, a Europe that refuses the competitive dictates of the present system. The neo-liberal logic has brought about the crisis and revealed its own failings. This logic, which underlies all the founding documents of the European Union, in particular the Stability and Growth Pact and the Stability Mechanism Treaty, must be vigorously undermined. Budgetary and fiscal policies should not be uniform, since European economies are very disparate, but should rather be coordinated in order to find a solution that raises the standard. Europe must also drop its under-siege attitude towards immigration applicants and become a just and supportive partner for peoples in the South. The first step must be to unconditionally cancel Third World debt. It is clear that the present European treaties must be repealed and replaced by new ones in the context of a genuine democratic constituent process that will be the cornerstone for a different Europe.

Audit-Action-Abolition: this is the AAA we want, an AAA of the people, not the ratings agencies. We place this demand at the very heart of the public debate to affirm that alternative political, economic and financial choices are possible. Only powerful social struggles can make this “peoples’ AAA” a reality and a means of effecting a radical change in logic.

Damien Millet is the spokesperson for CADTM France (www.cadtm.org); Éric Toussaint has a doctorate in political science from the Universities of Liège and Paris VIII; he is president of CADTM Belgium. Éric Toussaint and Damien Millet are the authors of Debt, the IMF, and the World Bank, Sixty Questions, Sixty Answers, Monthly Review Press, New York, 2010. Together they edited La Dette ou la Vie, Editions Aden, Brussels, 2011.

Translated by Judith Harris.


Eric Toussaint

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.


Damien Millet

professeur de mathématiques en classes préparatoires scientifiques à Orléans, porte-parole du CADTM France (Comité pour l’Annulation de la Dette du Tiers Monde), auteur de L’Afrique sans dette (CADTM-Syllepse, 2005), co-auteur avec Frédéric Chauvreau des bandes dessinées Dette odieuse (CADTM-Syllepse, 2006) et Le système Dette (CADTM-Syllepse, 2009), co-auteur avec Eric Toussaint du livre Les tsunamis de la dette (CADTM-Syllepse, 2005), co-auteur avec François Mauger de La Jamaïque dans l’étau du FMI (L’esprit frappeur, 2004).

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