Like the governments of the South did in the 1980s, the governments of the North are using the debt as an excuse to introduce austerity policies that in many respects are similar to the structural adjustment programmes (SAPs) advocated by the IMF and the World Bank. Naturally, we have nothing against austerity measures being applied to capital holders, speculators and high income earners as a means of ensuring social justice and respect for people’s economic, social and cultural rights (ESCR). Such measures would necessarily include a drastic reduction in arms spending, the suppression of tax benefits for the richest, vigorous counter-measures against tax fraud, and the removal of subsidies and other financial advantages available to exporters. But in actual fact, only the popular classes are presently being hit by these austerity policies, which drastically reduce public spending in essential sectors such as health care and education - areas where spending needs to be increased, financed by higher taxes on big incomes, company profits and personal fortunes. Breaking the vicious circle of debt is a political, economic and social imperative. International public law |1| offers governments of good will some solid arguments for casting off the shackles of debt and the anti-social policies going by the name of “rigour” or “austerity” inspired by neo-liberal thinking.

Repayment of the public debt is not inevitable

To be bound by a loan contract, the State must have given its free consent. This consent has a legal consequence: an obligation of the State to repay the debt it has contracted. This obligation is based on the principle of pacta sunt servanda (agreements must be respected), as embodied in article 26 of the 1969 Vienna Convention on the Law of Treaties |2| through the principle of State continuity, by which the debts of States are passed on from one government to the next.

However, these principles are not absolute |3| and are only valid for “debts contracted in the general interest of the community”- the key words here being “the general interest of the community” |4|. According to international law, the assessment of a debt’s general interest and whether that debt is licit or illicit comes under the competence of the public authorities |5|. A public debt audit carried out by the authorities and involving representatives of “civil society” is therefore a perfectly legal process.

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Footnotes

|1| Sources of international public law are listed in article 38 of the Statute of the International Court of Justice. They include international conventions, custom, general principles of law, doctrine, and jurisprudence.

|2| See http://untreaty.un.org/ilc/texts/in...

|3| The pacta sunt servanda rule dates back to an era when international relations were established almost entirely by contract (alliances and peace treaties). We now have binding international law. A contract cannot be valid unless it respects international public order (in particular the jus cogens which covers the peremptory norms of international law, the United Nations Charter which affirms its primacy over any other international agreement, etc.).

|4| David Ruzié, Droit international public, 17e édition, Dalloz, 2004, p. 93.

|5| See Éric Toussaint and Hugo Ruiz Diaz, “L’audit de la dette : un instrument dont les mouvement sociaux devraient se saisir”, http://www.cadtm.org/L-audit-de-la-....

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