Éric Toussaint argues in favour of a law against vulture funds at the French National Assembly

1 February by CADTM , Eric Toussaint


On Thursday 25 January 2024, Éric Toussaint was invited by Michel Sala, an MP of La France Insoumise, at the French National Assembly. He talked about the new debt crisis that hits a large number of countries of the South and is only beginning. He also called on MPs to vote a bill against vulture funds so as to go further than the law for more transparency and against corruption voted in December 2016. He also suggested that MPs adopt a bill forcing private creditors to participate in debt cancellations when an agreement has been reached with public creditors.



After MP and chair of the finance committee of the National Assembly Éric Coquerel introduced his perspective on illegitimate debts and the need to cancel the euro zone debts held by the ECB ECB
European Central Bank
The European Central Bank is a European institution based in Frankfurt, founded in 1998, to which the countries of the Eurozone have transferred their monetary powers. Its official role is to ensure price stability by combating inflation within that Zone. Its three decision-making organs (the Executive Board, the Governing Council and the General Council) are composed of governors of the central banks of the member states and/or recognized specialists. According to its statutes, it is politically ‘independent’ but it is directly influenced by the world of finance.

https://www.ecb.europa.eu/ecb/html/index.en.html
, Éric Toussaint talked about the new debt crisis in countries of the South.

He recalls that this debt crisis largely results from external shocks coming form the North, such as the steep rise in the prices of cereals, fertilizers and fuel after Russia’s invasion of Ukraine, and mainly the sharp rise in interest rates Interest rates When A lends money to B, B repays the amount lent by A (the capital) as well as a supplementary sum known as interest, so that A has an interest in agreeing to this financial operation. The interest is determined by the interest rate, which may be high or low. To take a very simple example: if A borrows 100 million dollars for 10 years at a fixed interest rate of 5%, the first year he will repay a tenth of the capital initially borrowed (10 million dollars) plus 5% of the capital owed, i.e. 5 million dollars, that is a total of 15 million dollars. In the second year, he will again repay 10% of the capital borrowed, but the 5% now only applies to the remaining 90 million dollars still due, i.e. 4.5 million dollars, or a total of 14.5 million dollars. And so on, until the tenth year when he will repay the last 10 million dollars, plus 5% of that remaining 10 million dollars, i.e. 0.5 million dollars, giving a total of 10.5 million dollars. Over 10 years, the total amount repaid will come to 127.5 million dollars. The repayment of the capital is not usually made in equal instalments. In the initial years, the repayment concerns mainly the interest, and the proportion of capital repaid increases over the years. In this case, if repayments are stopped, the capital still due is higher…

The nominal interest rate is the rate at which the loan is contracted. The real interest rate is the nominal rate reduced by the rate of inflation.
unilaterally decided by the EU, US and UK central banks.

This situation could make it possible for over-indebted countries of the South to call upon a fundamental change in circumstances or force majeure, two notions of international law that allow a suspension of debt repayment in case of a situation has radically changed with respect to what it was at the time the loan was contracted.

See also: Is there a debt crisis in the South and what is recommended by the CADTM?

Éric Toussaint then recommended to reinforce the law voted in December 2016 in the line of the law voted in Belgium in 2015. The efficiency of such a law depends on the number of countries willing to implement it.

Similarly it is urgent that several countries consider adopting a law that involves private creditors in debt restructurings. The latter are playing dead and taking advantage of the restructurings signed by bilateral and multilateral creditors to continue to be repaid by over-indebted countries.

Another bill will be examined by the Belgian Parliament before the June 2024 elections. It aims at forcing private creditors to cancel their claims on countries of the South in the same proportion as public creditors.


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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 Greece 2015: there was an alternative. London: Resistance Books / IIRE / CADTM, 2020 , Debt System (Haymarket books, Chicago, 2019), 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, 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. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.

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