Committee for the Abolition of Illegitimate Debt

On November 27^th the Eurozone’s Council of Finance Ministers announced its decisions regarding the Greek public debt. This decision, deadly for Greece’s fiscal situation, destroys the lives of the people, putting their interests behind the interests of the creditors. It allegedly lowers Greek debt by 40 billion euros, by lowering 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. , extending 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. repayments, providing for a debt buy back scheme, and extending loan maturities. On the other hand,

• It demands horrific austerity measures, which include even further reductions in wages, pensions, and social spending, plus widespread redundancies of civil servants, etc.
• It is rife with inaccuracies and steeped in vagueness regarding the measures planned, for example a debt buy back scheme that may or may not actually be implemented, or at least not in the amount currently foreseen.
• It increases the public debt by 43.7 billion euros, equivalent to the size of the new loan tranche. Thus it burdens taxpayers and workers with new obligations, on top of the 148.6 billion which Greece had already borrowed from the Troika Troika Troika: IMF, European Commission and European Central Bank, which together impose austerity measures through the conditions tied to loans to countries in difficulty.
  
  IMF : https://www.ecb.europa.eu/home/html/index.en.html (126.9 from the Eurozone and 21.7 from the IMF 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 ). This lending in its entirety constitutes an odious and illegitimate debt.
• It heightens the illegitimate nature of the Greek public debt, as 23.8 billion euros awaiting disbursement in December will be directed towards the banks, under the bank recapitalization Recapitalization Reconstituting or increasing a company’s share capital to reinforce its equity after losses. When the banks were bailed out by the European States, they were most often recapitalized with no conditions attached and without the States having the decision-making power their participation in the banks’ capital should have given them. scheme, and will not cover any fiscal needs of the budget. Debts of the banks are thus being socialized, whilst profits remain private.
• It by no means solves the problem of public debt sustainability. Even by the Troika’s own estimates, debt will approach 175% of GDP GDP
  Gross Domestic Product Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another. in 2016, and will fall to 124% after 2020. But it was at this level in 2009, before the whole ‘stabilization’ packages started.
• It does not impose, leaving it for the future, the necessary bold reduction of Greek debt. In fact, it makes debt reduction dependent on political developments in Germany, envisaging it for after the October 2013 German elections.
• It holds Greek society to ransom, and does this even officially, through the appointment of foreign Gauleiters and the official opening of the escrow account, in which all loan disbursements will be put, together with any revenue from privatizations and any fiscal surplus. All these funds will solely be used for debt repayment.
• It leaves the door wide open for more and more austerity measures, implemented though ‘structural mechanisms’, which will apparently guarantee that fiscal targets are fulfilled. Since the recession will remain until at least 2014, Eurogroup’s decision means automatic reductions in wages and pensions.
• It allows, through the ‘creative ambiguity’ of its terms, a debt buy back scheme to be implemented by Greek pension funds Pension Fund
  Pension Funds Pension funds: investment funds that manage capitalized retirement schemes, they are funded by the employees of one or several companies paying-into the scheme which, often, is also partially funded by the employers. The objective is to pay the pensions of the employees that take part in the scheme. They manage very big amounts of money that are usually invested on the stock markets or financial markets. and Greek banks. This will bring the dissolution of Greek pension system and the hasty de-Hellenisation of the Greek banks

For all these reasons, the Greek Debt Audit Campaign believes that the decision of the Eurogroup’s Council of Finance Ministers deepens rather than solves the fiscal crisis, and must therefore be overturned by society itself.

The Greek Debt Audit Campaign insists that conflict with the creditors, i.e. the IMF and the EU, who absorbed the majority of Greek public debt, is unavoidable. Standing up to the creditor loan sharks includes suspension of capital and interest payments, and unilateral rescinding of the Loan Agreements and the Memoranda, on sovereign state terms. Only this path can lead to the necessary cancellation of most, if not all, public debt. The establishment of an Independent Audit Commission, which will open up the books of public debt, is necessary!

 This Eurogroup decision harms tax-payers and public finances!

 Debt is illegal!

 Disobey the creditors!

For more information please see www.elegr.gr