Committee for the Abolition of Illegitimate Debt

The Global Week of Action against Debt and IFIs; a global mobilization that is gaining strength in Spain.

From October 8^th to 15^th, the Global Week of Action against Debt will be celebrated worldwide. The Citizen Debt Audit Platform (PACD) has joined this initiative and is planning numerous actions and activities in various cities in Spain to denounce the illegitimacy of debt and social cuts.

October 4^th, 2012 - The Citizen Debt Audit Platform (PACD - www.auditoriaciudadana.net/en) joins international mobilisations against debt as part of the Global Week of Action against Debt and IFIs. This week’s fight was established in the World Social Forum at Nairobi in 2007, to denounce the injustice of foreign debt on peripheral states and the submission policies imposed by multilateral agencies like 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.

http://imf.org or 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.

. “During the last five years, this week was held in Spain without much impact, but this year is due to become one of the biggest social mobilization weeks, since foreign debt also threatens our economy and subjugates our democracy” says one of the PACD activists.

The PACD states that, “as what happened from the 80’s with the people of Latin America, Africa or Asia, debt has become, in our country and in the European periphery, the financial power’s instrument of mass domination to also subjugate European democracies. The most blatant interference of international agencies in our sovereignty occurred last year with the shameful constitutional reform to prioritize debt repayment over people’s rights, without any social consultation”.

They claim that “a new blow to our fragile democracy is being prepared by the European Stability Mechanism ESM
European Stability Mechanism The European Stability Mechanism is a European entity for managing the financial crisis in the Eurozone. In 2012, it replaced the European Financial Stability Facility and the European Financial Stabilisation Mechanism, which had been implemented in response to the public-debt crisis in the Eurozone. It concerns only EU member States that are part of the Eurozone. If there is a threat to the stability of the Eurozone, this European financial institution is supposed to grant financial ‘assistance’ (loans) to a country or countries in difficulty. There are strict conditions to this assistance.

http://www.esm.europa.eu/ (ESM), which will subject us to the dictates of the International Monetary Fund and its sadly famous Structural Adjustment Structural Adjustment Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).

IMF : http://www.worldbank.org/ Programmes that devastated the economies of poor countries for decades. Theft of popular sovereignty has made clear that democracy is incompatible with capitalism”.

For this, they state that “debt is illegitimate because, as in peripheral countries, it has been induced by financial powers to subdue populations to their private interests. In addition, most of Spanish public debt has been subscribed to benefit a small elite in detriment of the majority. The clearest example is seen in the bank rescue, which has meant more than 215,000 million euros to the public treasury, to which we must add the 100,000 million bailout fund that the EU has made available for Spanish banks and which the State is the ultimate guarantor. Private debt becomes public debt and we are all made to pay, never benefiting from it, rather the contrary, for debt payment implies a huge drawdown of resources that ensure basic rights such as health, education, pensions or decent wages”.

Therefore, the PACD has started a citizen debt audit process to demonstrate the illegitimacy of public debt and private state guaranteed debt, to repudiate its payment and demand civil and criminal liability for those who generated it. They call on all people to join this process and hit the streets on the Global Week of Action against Debt, specially on October 13^th, (http://www.globalnoise.net/) to defend our sovereignty and shout out loud and clear: DON’T OWE! WON’T PAY!

The activities planned for this week in different cities are available on the web: http://www.auditoriaciudadana.net/en, Facebook http://www.facebook.com/AuditoriaCiudadanaDeuda and Twitter: @AuditCiudadana

Contact:
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