31 March 2016 by Jérémie Cravatte
On the second day of the Plan B conference in Madrid, the hundreds of participants spread themselves among the various proposed workshops. This report is about the two workshops on the debt issue, organized by PACD (Citizens’ Debt Audit Platform, Spain) and ICAN (International Citizens’ Debt Audit Network).
The first workshop |1| investigated the fact that debt, despite being a central tool of the current system of economic and political oppression, is hardly ever discussed by social movements.
It was perhaps one of the only Plan B |2| workshops that was truly collective, where participants’ experiences were used to think up alternatives regarding the matter under discussion. Two sessions were subdivided into workgroups which came up with different analyses, divergent and convergent, and suggested possible lines of action.
|STRENGTHS (internal)||WEAKNESSES (internal)|
|The debt theme cuts across boundaries||The debt theme is complex|
|Knowledge capital and rich analysis||Lack of knowledge and analysis|
|Analysis shared with other social movements (e.g. PAH, or Plataforma de Afectados por la Hipoteca,which defends housing rights in Spain.)||The occasional need for experts|
|The topic is hardly considered in Northern Europe.|
|OPPORTUNITIES (external)||THREATS (external)|
|Alternative media and social networking||Fatalistic attitudes and resignation like TINA (There is no alternative)|
|Gaining financial elbow room after non payment of debt||Mainstream media rarely discuss the topic of debt and give erroneous analyses|
|Finding connections between public debt and precarious households’ private debt||Fear (of overwhelming debt)|
|New spaces for political participation (e.g. in Spain at the municipal level)||The co-opting of political parties|
|Corruption = a highly topical theme even among the wider public||The dogmatic belief that debts must be repaid|
|Finding links with everyday life||The topic is too abstract|
|Learning from failures such as that of Syriza in Greece|
|Highlighting all victories, large and small|
In the light of this rapid collective analysis, we were able to come up with new ways of enhancing the movement of citizens’ debt audit collectives. One such idea was to draw up a map to be published on the Internet listing the success stories among anti-debt campaigns in Europe or elsewhere; another project was to publish a series of short videos— all in the same format— where each member of the ICAN citizens’ audit network would present the origins of their country’s debt, precisely how it impacts on the population’s daily lives and related ongoing struggles. Another idea was to provide a network of useful contacts from different countries who could help collectives when they get stuck on some specific technical matter, whether economic or legal.
In short, the need to reinforce the networks of collectives working on debt kept coming up again and again. This is the purpose of the ICAN network |3|… and it is the topic of the next workshop.
The second workshop |4| reviewed various citizens’ campaigns to audit municipal debt in Italy, the United Kingdom, Belgium, Spain and France.
Cristina Quintavalla, representing Audit del Debito Locale di Parma, (Parma’s Local Debt Audit) presented the case of Parma’s illegitimate debt and emphasized how sovereignty is at risk right down to the local level.
Parma’s municipal debt is mainly the result of tax breaks, wasteful and even harmful spending, high interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. -rates, speculation on property values and the corruption that makes all that possible. The citizens’ audit reveals that Parma has been subjected to a network of corruption composed of businessmen, bankers and public administrators that produced a debt of €860 million. The town council then proceeded to increase local taxes and reduce social spending. The affair finally brought down the town council after numerous judicial enquiries and citizens’ mobilization, |5| which had been facilitated by the work on the debt audit.
Another area that this audit analysed was the so-called PPPs (public-private partnerships) involving fundamental municipal public services such as water, waste disposal and gas. The local government itself took part in creating such structures which are subject to private law rather than public control, and whose debts do not appear on the council’s balance Balance End of year statement of a company’s assets (what the company possesses) and liabilities (what it owes). In other words, the assets provide information about how the funds collected by the company have been used; and the liabilities, about the origins of those funds. -sheet.
The Italians reminded us that the European Stability Pact (included in the Constitution in 2012) also concerns municipal debts – even though these only represent 2.5 % of the total public debt— and is zealously applied in Italy, completely undermining town councils’ autonomy. Thus they become both the victims and the culprits, leaving disobedience as the only way out.
The United Kingdom
Ludovica Rogers and Joel Benjamin, representing Debt Resistance UK (DRUK), explained the complex funding methods used by local authorities in the United Kingdom.
The collective is made up of activists and researchers who deconstruct the notion that the debt might be “apolitical”, a purely technical issue:
DRUK published its data on the platform WhatDoTheyKnow, which enabled Channel 4 to make a documentary on the subject. Amongst other things, DRUK works with trade unionists and other collectives to show the links between budget cuts and the way public authorities are financed.
Jérémie Cravatte, representing Belgium’s platform for a citizens’ audit of debt (ACiDe), provided several concrete elements connected to the preliminary findings of the Belgian campaign. He also addressed the issue of municipal debt audits.
Although municipal debts only account for 5% of Belgium’s total public debt, most local ACiDe groups have decided to target them as they are more tangible and because financial difficulties are felt most strongly at this level of power. The groups found that:
For its future activities, ACiDe has plans to develop contacts between its different groups (just as ICAN tries to develop contacts between different countries), to create an OCM (Citizens’ Municipal Observatory, in Spanish), |9| to take part in a campaign for the socialization of the bank Belfius, to imagine a way of auditing the private debt of the most disadvantaged people and to continue to provide other social movements with facts and figures on public debt and their own campaigns.
Yago Álvarez and Javier Solaruce, representing the PACD (Citizens’ Debt Audit Platform, Spain), brought news of what is perhaps the most advanced citizens’ audit campaign in Europe so far.
Not only do the new « town councils for change » (progressive and diverse political formations) call upon the PACD’s services to launch citizens’ audits of their debts, but even more importantly, the PACD itself has had time – a little over three years— to build itself up to the point where it can back up the social movement and ensure the fullest possible independence towards institutions. In other words, their objective is to keep going as a movement, come what may on a political and institutional level. Thus the speakers presented several major principles and projects dear to the PACD:
Last but not least, the PACD is organizing an « Audit Festival » in Barcelona in October 2016, don’t miss it!
Patrick Saurin, representing the collective for a citizens’ audit of public debt (CAC), drew attention to several perspectives of the struggle.
He, too, reminded us that the audit should not be limited to debt stock but extended to the entire public sphere, which requires a considerable number of citizens to get involved.
He emphasized that several local collectivities in France have questioned the terms of loans contracted with the bank Dexia, which amount to toxic loans. |11| This sort of thing can of course be looked into in other countries.
Finally he reiterated the need to socialize the entire banking sector to put an end to this debt system that we are mobilized against.
This led to an unexpected way of concluding the workshop, when two participants explained how they had begun a citizens’ audit in Switzerland and found themselves up against the question of money creation (highly topical at the moment in Switzerland). They decided to join the ICAN network; and we can only urge you to do the same!
A plenary session on debt was also held at Plan B conference, with the participation of Zoe Konstantopoulou, Eric Toussaint, Daniel Munevar, Andrej Hunko, Carlos Sánchez Mato and Sergi Cutillas. The video will be published on this site.
Translated by Vicki Briault Manus and Christine Pagnoulle (CADTM)
|4| Video coming shortly.
|5| Note that the new council, led by the “5 Star Movement”, has announced that it can do nothing about the debt run up by previous legislatures, contrary to what it claimed in its electoral promises.
|6| See Hammersmith and Fulham vs Goldman Sachs case.
|7| LOBOs, or Lender Option Borrower Options, are used by at least 240 English local authorities, to the tune of about £15 billion. They are very long term loans (up to 70 years) which start at a very low rate of interest and can be increased by the bank every five years. The local authority can then choose either to accept the new rate or to pay off the entire loan, usually including a penalty fee. The four banks which provide LOBOs are Barclays, Dexia, DePfa and RBS.
|8| For more information, read the article by ACiDe Liège, “Le CRAC : une institution qui assiste les communes ou les met sous tutelle ?” November 2014 (in French only) http://www.auditcitoyen.be/le-crac-centre-regional-daide-aux-communes/
|9| OCMs (Citizens’ Municipal Observatories) are a tool developed by our Spanish friends which, among other things, make it possible to publish clear and accessible information about public finances, to receive information or proposals from the population and to demand replies from the authorities.
|10| See “Nace en Madrid la Red de Municipios por la Auditoría Ciudadana de la Deuda” in El Salmon Contracorriente, February 2016 (in Spanish). http://www.elsalmoncontracorriente.es/?Nace-en-Madrid-la-Red-de
|11| Recommended reading on this topic: Patrick Saurin, Les prêts toxiques, une affaire d’Etat : comment les banques financent les collectivités locales, Paris : Editions Demopolis, 2013. 264p.