Committee for the Abolition of Illegitimate Debt

It was in a crowded room in Athens that parliamentary deputy Sofia Sakorafa, recently excluded from the governing socialist PASOK party for refusing to vote for austerity measures, opened the conference, “Debt and austerity: from the Global South to Europe.” From the outset, she set the tone by moving the debt issue beyond the borders of North-South divisions:”Debt is tied to the class question.“Indeed, the challenge of this event, which took place from May 6 to 8, a year almost to the day of the”rescue" of Greece by 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 (IMF) and the European Commission (EC), was to learn from the experiences of the South fighting against illegitimate debt, which primarily affects the poorer classes, and to mobilize for its cancellation.
What’s in play is establishing a link between the “Third World” and the periphery of Europe that is in the process of being “Third-worlded” (Greece, Ireland, Portugal ...) to learn from experiences in Latin America and elsewhere where they are trying to recover a sovereignty that the creditors have stolen from citizens and the state, to establish solidarity in Europe to better fight against a debt that oppresses the poorest people, and finally, to stimulate an audit commission in Greece to repudiate the illegitimate part of the debt that has not benefited the population.

During the three days at the conference, there were often some very radical interventions and when the public was allowed to take the floor, one sensed a boundless rage against the persistent injustice of the debt. These debates expressed a strong desire to end capitalist oppression. It was a place to discuss not reformism but a radical change leading to real social justice without debt bondage. Debt restructuring alone will not change the operating model that puts the weight on the shoulders of the weakest; this will not solve the problem but will amplify it by extending the deadline for repayments. You need to cancel the debts, and the audit is the necessary tool to achieve this. The audit is a prerequisite for determining the illegitimate part of the debt, which must be declared inadmissible and invalid in law. It’s a potentially very powerful tool, able to respond to the crisis, provided that its work is conducted independently, transparently and democratically and that the board is listening to the claims made by citizens in order to serve them.

In a country that in world history had given birth to a democratic form of government, the interference of 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 (the term commonly used in Greece to designate the trio of IMF, European Commission and European Central Bank Central Bank The establishment which in a given State is in charge of issuing bank notes and controlling the volume of currency and credit. In France, it is the Banque de France which assumes this role under the auspices of the European Central Bank (see ECB) while in the UK it is the Bank of England.

ECB : http://www.bankofengland.co.uk/Pages/home.aspx ) in affairs of state remains very unpopular and has aroused a fierce struggle from that part of the left that stands to the left of the Socialist Party now in power. The Troika has no popular mandate to impose its policies, the resulting debt is not the result of democratic negotiations and the negotiations are among individuals who speak on behalf of undemocratic institutions. The difference is huge and the Troika, which occupies Greece politically and economically, could be deported to rid the Greek citizens of this illegitimate presence. While the Greek people are being bled dry to repay a debt that has no or very little benefit to them, Greece is buying military equipment from its European neighbors that are supposed to help Greece; meanwhile workers’ rights are destroyed and the rate of suicide is increased from one per day in 2009 to two per day in 2010.

It is time to say, “stop!” to the plundering capitalist debt that transfers capital from those who produce the wealth to those who speculate and influence the markets! That’s just a little of the substance of what could be felt during various presentations at this seminar. The audit experience in Ecuador in 2007 and 2008 — which allowed it to cancel a significant portion of illegitimate debt and save $300 million per year for 20 years — is a rich education for an alternative in Greece still to be built. … Several representatives of Ireland, where the state plans new budget cuts of 6 billion Euros in 2011, aroused the audience by announcing that a commission of independent experts brought by AFRI and the Ireland Debt and Development Coalition associations and the Unite union, had already begun preparing the ground for a citizen’s audit in their country. To recap, the EU and the IMF have initiated a plan to loan 85 billion Euros to Ireland, spread over several years, destined in particular to bail out the banking sector.

The Greek people, just like the Tunisian people, may, under international law, reject the odious debt Odious Debt According to the doctrine, for a debt to be odious it must meet two conditions:
1) It must have been contracted against the interests of the Nation, or against the interests of the People, or against the interests of the State.
2) Creditors cannot prove they they were unaware of how the borrowed money would be used.

We must underline that according to the doctrine of odious debt, the nature of the borrowing regime or government does not signify, since what matters is what the debt is used for. If a democratic government gets into debt against the interests of its population, the contracted debt can be called odious if it also meets the second condition. Consequently, contrary to a misleading version of the doctrine, odious debt is not only about dictatorial regimes.

(See Éric Toussaint, The Doctrine of Odious Debt : from Alexander Sack to the CADTM).

The father of the odious debt doctrine, Alexander Nahum Sack, clearly says that odious debts can be contracted by any regular government. Sack considers that a debt that is regularly incurred by a regular government can be branded as odious if the two above-mentioned conditions are met.
He adds, “once these two points are established, the burden of proof that the funds were used for the general or special needs of the State and were not of an odious character, would be upon the creditors.”

Sack defines a regular government as follows: “By a regular government is to be understood the supreme power that effectively exists within the limits of a given territory. Whether that government be monarchical (absolute or limited) or republican; whether it functions by “the grace of God” or “the will of the people”; whether it express “the will of the people” or not, of all the people or only of some; whether it be legally established or not, etc., none of that is relevant to the problem we are concerned with.”

So clearly for Sack, all regular governments, whether despotic or democratic, in one guise or another, can incur odious debts. incurred under a dictatorial regime that was used to maintain and fortify tyrants in power, while repressing the population. But beyond that, can they claim compensation? Is the loan of 110 billion Euros granted by Brussels and the IMF to Greece in exchange for austerity imposed on the people legitimate? Is debt compounded by “bailout” for rescuing banks legal? What is the priority of the state budget, must it go first to the repay creditors and expenditure on arms ?

All these issues have fueled the debate in Greece for an “independent audit” of the debt that includes representatives of civil society. They are the premises to all arguments, which if advanced in the legal arena, should have these debts declared inadmissible and invalid in law. And if justice is not done, public pressure may force it through. An effective audit can disrupt the 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. of power between the holders of wealth and those who produce it — it can only help move things in the direction of a more just distribution. It is a useful first step to other strong measures needed to take the path of a creating a radically different society based on wealth-sharing, justice and solidarity and which remains to be built by and for the people.

Translated by John Catalinotto for Tlaxcala