Illegitimate Greek Debt

13 June 2013

By Alice Picard, Jubilee Scotland Volunteer (All posts are the views of the author, not Jubilee Scotland as an organisation).

I don’t know what you were up to this Tuesday 11 June 2013 but I was demonstrating in front of the Edinburgh International Conference Centre. Well, almost. Because despite long negotiations with the police, we never made it through to the entrance of the building where the TEDGlobal Conference was taking place. No, we were not trying to get there without paying the £6000 admittance fee. We were rather chanting our opposition to George Papandreou giving a speech in the first session of the conference.

Image “Papandreou, who’s that?”, you ask. Well, you know, the former Prime Minister of Greece, elected in 2009 who served a two-year premiership during which time he was supposed to put an end to austerity measures. “Oh, so that’s why he was invited. To tell attendees how he managed that.”, you naively assume. Well, not exactly. By the way, I thought you were aware of the dreadful current situation in Greece! Mr. Papandreou “drew lessons from the Greek crisis”. I assume the many Greeks who took part to the protest were perfectly able to do that. “We know the lessons from the crisis firsthand. We don’t need lectures from the bosses”, their banner read [1].

ImageLet us imagine anyway how George Papandreou’s speech sounded like.

“Ladies and Gentlemen, thank you for being here today. I understand you are expecting me to draw lessons from the Greek crisis. When I came into office in 2009, I inherited a fair amount of debt, to say the least. After meetings with my European colleagues and elected – but mostly non-elected – officials, I got convinced that the best way to tackle the Greek debt and deficit was to get the country into deep recession. The best way to achieve such a result was of course to implement austerity measures, designed in agreement with the Troika, that is the European Central Bank (ECB), the International Fund (IMF) and the people of Greece. I’m kidding, I meant the European Commission (EC).

Of course it did not matter whether or not the same people who had voted me in agreed with these measures. They were quite opposed to it by the way. As soon as we started reducing the minimum wage and pensions, cutting public spending, privatising and making civil servants redundant, they responded by organising massive protests and general strikes. I had a ready-to-use solution though. It was not the first time such policies were imposed against the will of the people. I could count on the IMF’s decades-old experience with Third World countries and on my own country’s history for that matter [2]. Now, if you find yourself faced with opposition, do not slow down the process and keep going. Ideally you would even buy state of the art military equipment and show no mercy for the protesters. Do not forget to criminalise workers’ ability to defend their rights. Naomi Klein calls this efficient combination the “shock doctrine”. In the end, your opponents should grow tired and look powerlessly at the social fabric of the country being ripped apart [3].

How can you assess my success? Not only Greece fell into a deep recession, it is now also facing a humanitarian crisis. Thanks to widespread poverty, people can no longer afford medication, to heat their home, to go to the hospital or to send their children to school. 21% of people now live in poverty and 62% of young people are unemployed. But it is the price they pay for the collapse of the international financial system, bank bail-outs, speculation, the euro and the failure of the successive Greek governments to implement a fair and effective tax system. As you know, “we’re all in this together”. In addition, we cannot be expected to cut on military expenditures, this money goes into the pockets of French and German military industries. So, in addition to reduction in wages for those lucky enough to have a job, we decided to sell out water, energy and railways and to increases taxes, for everyone. Isn’t it a brilliant idea? We ask the average population to pay more with less money. Hence the rise in the number of people committing suicide and the rise of the far right .

Image I am happy to announce that Golden Dawn had Members of Parliament elected in the last elections. With massive support for the party within the police, racially motivated violence can go on with impunity. You can also add to my record that life expectancy is due to fall and the Greek debt to go up this year. Let’s be honest, the point of all that was not really to reduce it anyway. [4]

Fair enough Mr. Papandreou. Now, I know most countries in Europe are tempted to follow suit. However, in a democracy, you should take people’s opinion into account before you go ahead with measures which seriously undermine human rights. If the only way you found to pay back the debt is to cut on healthcare and education and to increase poverty, then it certainly means it is unpayable. As such, it should not be repaid. All the more that if a debt audit is to publicly uncover where the debt came from, who benefited from it and whether and how it should be repaid. Should the Greek people pay for the 108 billion euro required to bail out the banks for instance? Finally, if force has to be employed to push the austerity measures through, this is another indication that the debt is illegitimate. Illegitimate debt actually builds on the concept of odious debt, presented for the first time in 1927 by an economist called Alexander Sack. Odious debt is also based on three prerequisites. First the loan has to be received by a government without the approval and knowledge of the people. Secondly the loan is not spent on activities beneficial to the people and finally the lenders know of this situation. Ironically, this concept has been used several times by the United States to repudiate debt, most recently in Iraq. That the members of the Paris Club asked for the concept not to be officially mentioned was not a reason not to appeal to the concept. Instead Mr. Papandreou, you gave up the sovereignty of Greece and defaulted on the Greek people.

You did not get out of the building Mr. Papandreou in spite of us chanting “Papandreou get out! We know what you’re all about: cuts, job losses, money for the bosses!”.

Image You cannot deny you – and your successors – implemented the cuts and the job losses. As to the “money for the bosses”, two examples will speak for themselves: the national lottery was privatised despite the fact that it was highly profitable and one gold mine in the north of the country was sold for £9.5 million whereas it is believed to have gold and copper worth £8 billion. Other leaders showed more boldness than this though.

Some governments have refused to pay the debt. Countries such as Ecuador, Argentina or more recently Iceland defaulted, audited their debts or insisted their own terms for repayments. In Argentina, it took the President having to flee in helicopter under popular pressure. Not surprisingly, these countries all fare better than Greece, Spain or Portugal. Ecuador even went further and passed a constitution which prohibits the socialisation of private debts. Beforehand, an audit reviewing all debt contracts from 1956 to 2006, had proven the debt was odious, illegitimate and unconstitutional. During the 1980s and 1990s, Ecuador had spent 50% of its budget on debt repayments and 4% on healthcare. Rafael Correa, elected in 2006, decided debt repayments would no longer prevail on life. Thus, Ecuador declared the cessation of payment for 70% of Ecuador’s debt in bonds. But I guess you were not really willing to go against the neo-liberal agenda. People are though. They are prepared to take to the street. They already have in Scotland to call for the bedroom tax to be axed and it is no surprise people here were keen to hold you accountable Mr. Papandreou. It is not worth putting the blame on Brussels and financial markets [5], you also share some responsibility.

[1] Helen Walters, “Protesting Papandreou: Anti-auterity demonstrators at TEDGlobal 2013”, TED  Blog.

[2]  Katerina Kitidi and Aris Hatzistefanou, Debtocracy, 2011

[3] Nick Dearden, “Nick Dearden blogs from debt campaigner delegation to Greece”, Jubilee Debt Campaign.

[4] Nick Dearden, “Nick Dearden blogs from debt campaigner delegation to Greece”, Jubilee Debt Campaign.

[5] Helen Walters, “The failure of leadership in politics: George Papandreou at TEDGlobal 2013”, TED Blog.


Scotland 2013 and Beyond

21 May 2013

A platform to discuss the key guiding principles and values that should shape Scotland’s international development role.

By Alice Picard, Jubilee Scotland Volunteer (All posts are the views of the author, not Jubilee Scotland as an organisation)

Image

“Scotland 2013 and Beyond: Our values and principles for a just world” was organised by NIDOS, Network of International Development Organisations in Scotland, in Edinburgh on May 17th 2013. The sun was shining outside the Radisson Blu Hotel but it was still worth staying inside. Indeed, as most of the speakers put it at the end the event, it was inspiring.

It was good to have speakers from different horizons in the morning. International horizons as the speakers were from Scotland, the UK as a whole but also from Sweden and Zambia. Moreover, we could hear from the academic world as well as from the corporate and third sectors. It is important to reflect on the future of international development together, integrating different values and perspectives in the process. What I would remember from the morning speeches would be the idea of solidarity. Solidarity as one of the main values put forward by Judith Robertson from Oxfam for instance but also as a practical policy of the Swedish Government as presented by Peter Sörbom, EU Policy Officer at CONCORD Sweden.

Image

Values were also the point of focus of the morning workshops. We were supposed to discuss the five guiding values and principles that we would like to see shape Scotland’s policy towards the outside world. My feeling is that even though each participants came to the workshop with personal values that he or she particularly valued, the exchange was enriched by the speeches that were delivered just before. At least, that is what happened in my case. The third three values I wrote on my sheet of paper were Social Justice, Equality and Sustainability. I would have chosen them anyway, with or without the input of the morning speakers because I believe in them. However, thanks to the speakers’ contribution, I went beyond that and started thinking about what other values were also critical to their implementation. The two last values I wrote down were thus Accountability and Coherence. Accountability because choices made at some point should be up for challenge at any time of their implementation. Accountability is essential whenever money is involved, it goes without saying. Coherence because you cannot give from one hand and take from the other. That is sending aid to developing countries whilst at the same time not requiring multinational companies to pay their fair share of taxes to the countries of which they exploit the resources. And that is only one example of the way money can flow away from where it is the most needed.

Again, the most inspiring part was the debate between the participants. The aim was to talk to as many people as possible in order to explain why we had chosen one value over the others. We were allowed to switch values if we found someone convincing. The discussions I had were stimulating and I have to say I was about to change my own values for two new ones: Empowerment and Interdependence. Empowerment because it is crucial to empower individuals and civil society in the Global North as in the Global South and Interdependence because it leads to considering development aid as in our own interest. Each group came out with a certain number of values that were written down and then stuck up in the main room during lunch break so that every one could vote for five values once again.

Image

The choice was difficult to make and I was particularly aware that I was voting as the vast majority of the audience. The last vote I cast was then for free education as no dot appeared yet next to these two words. I could try to explain why but that might be too long, really. Just randomly think about two other values: Empowerment again but also democracy.

Later on, we had the chance to hear from Humza Yusaf, Scottish Minister for External Affairs and International Development. My apologies to the supporters of the status quo but what struck me the most in the Minister’s speech was the introduction. Mr Yusaf pointed out that external affairs and international development were a reserved matter. Its conclusion, not a polemical one, was that it was still worth discussing them, here in Scotland. Mine would be that it is an argument in favour of Scotland’s independence. The values we discussed throughout the day seem to me as an appropriate base to start afresh and adopt a complete new approach to external affairs. An approach that would be coherent – remember? – and would get rid of arms deals. Yes, it would be brilliant if Mr Yusaf had the real powers to put the values he mentioned into practice.

A lot is already being done in Scotland though, as I discovered during the afternoon workshop I had signed up to, on Fair Trade and Procurements. There are actually no little steps in this area. Once tea and coffee are fairly trade, people consequently start asking about other items, such as milk or even clothing. Interestingly, the discussion on fair trade also touches on local supply and transparency of the whole supply chain. Public authorities and bodies have undoubtedly a key role to play to set up guidelines and good practice. It is also through them that citizens could become well-informed customers, accustomed to fair trade products.

To conclude, I would say I was thrilled to witness people thinking together and actually working towards a common goal. Not only for the sake of exchanging experience and networking but also because beside people from organisations active in the field of international development, there were also a few politicians and people who were there on their own behalf. The discussion has to go on so that when it is time to change or improve Scottish policies, ideas will be ready to pick up.