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ICAN Meeting in Thessaloniki
It couldn’t happen in Ecuador
by Nick Dearden
19 February 2013

Groups like Jubilee which have worked on ‘Third World Debt’ have campaigned against illegitimate debt for many years. Debt resulting from the sales of weapons to some of the late twentieth century’s most horrific regimes; from vanity projects built by dictators; and debt payments which impoverish millions of people all represent clear examples of debts which are illegitimate. But, we’re often asked, how do these types of debts possibly relate to the people of Europe today?

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 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. 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.

Nick Dearden

is the director of Global Justice Now