Committee for the Abolition of Illegitimate Debt

Last night we had a talk from Myriam Bourgy from CADTM who gave some clear answers. First illegitimate debt is about imposed authority. There couldn’t be a clearer example of imposed authority than what’s happening in many European countries today. Austerity measures and privatisation are being imposed by the totally unelected 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 which has no legal authority to do what it’s doing.

These measures have either been passed in conditions of serious civil strife, or by puppet governments that themselves have no legitimacy or accountability to their people. Laws have been passed which bind democratic governments far into the future, whatever the people decide at subsequent elections.

Second, illegitimate debt comes from useless projects which exist to suck wealth out of the public sector and have no benefit for the vast majority in a country. We used to talk about ‘white elephant’ projects in Africa. What is the difference to Public Private Partnerships, which boast a wealth of useless projects – from airports that have never seen a plane and motorways that have never seen a car, to hospitals that are bankrupt? These projects have been used to make a killing by ‘investment’ firms, while leaving a mountain of hidden debt for the public.

Then there’s the impact of repaying the debt. For years, the payments of debts has sucked wealth out of Southern countries that could have saved the lives of millions of people if it had been spent on healthcare, agricultural support and such like.

Today the same repayments are taking free healthcare from those who once had it, making homeless those who can’t afford their inflated rents, and causing sharp rises in suicide and murder rates. A pillar of democracy – workers rights to collectively bargain for their terms and conditions – has been removed in Greece, Italy and Spain. If human rights were properly enforced in the world, politicians would be in court for these violations.

If anyone still thinks Europe’s debt is a million miles away from the illegitimate debt of the South, we should remember that the Latin American debt crisis also began with massive bank bail-outs, with the help of 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 . Ecuador learnt from its experience and has now passed a constitution which prohibits the socialisation of private debts. In other words, a bank bail out in Ecuador, of the sort we’ve seen right across Europe, would be unconstitutional today. Any resuscitation of democracy in Europe will need to learn similar lessons.