Committee for the Abolition of Illegitimate Debt

Hungary has faced its third week of demonstrations against Prime Minister, Ferenc Gyurcsany, member of the Socialist Party, a recording of whom revealed last Sunday the lies and the basically anti-democratic behaviour.

In order to win parliamentary elections last April, the Prime Minister has knowingly concealed to the people the neoliberal measures and the social regressions he was going to decide once the ballot finished.

CADTM understands the exasperation and anger of the Hungarian people, who wanted to oppose by his vote to 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 and 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.

diktats, but who is going to suffer directly from them because of an unworthy, today illegitimate, power.

It is clear now that the defenders of neoliberal globalisation, supported by the IMF and the World Bank in their catastrophic undertaking, are ready to use any means to reach their goal.

« We were lying in the morning, we were lying in the evening », said Gyurcsany, thus making it clear that such decisions were largely premeditated.

It is almost certain that many other countries have suffered from such behaviours without any unexpected recording revealing the cynicism, hypocrisies and dishonesty of their leaders.

Economic measures in question are largely used throughout the world, imposed for 25 years by the international financial institutions, the World Trade Organisation WTO
World Trade Organisation The WTO, founded on 1^st January 1995, replaced the General Agreement on Trade and Tariffs (GATT). The main innovation is that the WTO enjoys the status of an international organization. Its role is to ensure that no member States adopt any kind of protectionism whatsoever, in order to accelerate the liberalization global trading and to facilitate the strategies of the multinationals. It has an international court (the Dispute Settlement Body) which judges any alleged violations of its founding text drawn up in Marrakesh.

, the United States, the European Union and many other actors. These measures, which consist mostly in all-out liberalisation, massive privatisations, huge reductions in social budgets, attacks against social protections and setting up of a tax-system that protects income from the capital and worsen inequalities, trample on democracy and prevent the basic human rights from being guaranteed.

CADTM demands the resignation of Hungarian Prime Minister Ferenc Gyurcsany and that of all those who have used such schemes throughout the world to impose such policies.

Finally, CADTM demands the definitive abandonment of 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/ policies imposed by the IMF and the World Bank, and the non-negotiable respect of democratic principles.