Press Release

The CADTM condemns the disinformation campaign on the Greek debt and the rescue plan by private creditors

12 March 2012 by CADTM

On Thursday night (8 March 2012) more than 85% of private creditors (banks, insurance companies, 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.
, etc.) agreed to take part in the restructuring of the Greek debt by cancelling EUR 107 billion. On paper it looks as though they are forfeiting 53.5% of their claims. Yet actually this is a sweet deal for Greek and European (mainly German and French) banks, though not for the Greek people, who will have to face further deterioration in their living conditions.

Creditors and the Greek government have in fact set up a complex package: private creditors swap their Greek bonds for new bonds at lower face value. So for a bond Bond A bond is a stake in a debt issued by a company or governmental body. The holder of the bond, the creditor, is entitled to interest and reimbursement of the principal. If the company is listed, the holder can also sell the bond on a stock-exchange. that was initially worth 100 euros, creditors receive a security at a face value of 46.5 euros. Far from losing, however, private creditors exchange securities that were sold at 15 to 30 euros on the secondary market Secondary market The market where institutional investors resell and purchase financial assets. Thus the secondary market is the market where already existing financial assets are traded. against much safer securities.

In addition, 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.

is granting a new loan of 130 billion on condition that the amount be used to repay the debt and support the banks. While all the major media repeat the official anthem that the Greek debt has been reduced by 107 billion, they forget to take into account the new loan of 130 billion granted by the Troika. At the end of the day private creditors are the lucky ones and are being replaced by international official creditors (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.
, eurozone States, 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.
) that will force the Greek government to take even harsher antisocial measures.

While in case of dispute 85% of the old bonds fell under Greek jurisdiction, all the new bonds will be subject to English law. The creditors’ aim is to curtail Greece’s ability to default or cancel the debt.

For the CADTM, this new plan is a hoax: while claiming to rescue Greece it actually saves the day for private creditors though they are largely responsible for the Greek debt. Banks used part of the public bail-out money they received in 2008-2009 to speculate on the Greek debt and made huge profits before pushing Greece into the predicament it is now in.

The CADTM denounces all loans from the Troika to Greece since May 2010 as odious and therefore void, since they amount to a permanent violation of economic, social, civic and political rights of Greek citizens.

The CADTM commends the courage and determination of the Greek people fighting the inhuman austerity policies imposed by the Troika. The creditors’ AAA (Austerity Austerity Austerity) must make way for the peoples’ AAA: Audit Alternative Abrogation.

For the CADTM the solution will only come from a radically different approach. In Greece as in other countries subjected to the Troika, it is time to stop repaying the debt and to abandon anti-social measures. To fight the disinformation campaign on the Greek crisis we must continue to push for a citizens’ audit of the public debt with a view to abrogating its odious or illegitimate part. The CADTM fully supports the Campaign for auditing the Greek debt and the audit committees established in several other European countries. The CADTM calls for more actions of solidarity with the Greek people and for a wide European social front against austerity policies.


CADTM ( ) :
CADTM Belgium
Renaud Vivien, jurist, renaud at
Eric Toussaint, president, eric.toussaint4 at

CADTM France
Damien Millet, spokesperson for CADTM France, France at

Greek Committee against the debt – CADTM
Sonia Mitralia, reference activist at the Greek Committee against the debt - CADTM, sonia.mitralia at,
Yorgos Mitralias, reference activist at the Greek Committee against the debt - CADTM, giorgos.mitralias at

Translated by Christine Pagnoulle and Judith Harris

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