[Marxism] Greek parliament launches debt audit

Dayne Goodwin daynegoodwin at gmail.com
Tue Apr 7 02:42:56 MDT 2015

Greek parliament backs setting up committee to investigate bailout
by Karolina Tagaris
Reuters, April 7

ATHENS - Greek lawmakers voted on Tuesday in favor of setting up a
committee to examine the circumstances under which Greece agreed to
bailouts totaling 240 billion euros ($260 billion) with the European
Union and International Monetary Fund.

Relations are tense between Athens and its creditors, on whom it
depends for money to stay afloat. Greece, which has not received any
bailout funds since last August, is fast running out of cash and
struggling to strike a deal on reforms needed to unblock that aid.

"After five years of parliamentary silence on the major issues that
caused the bailout catastrophe, today we commence a procedure that
will give answers to the questions concerning the Greek people," Prime
Minister Alexis Tsipras told lawmakers before the vote in the early
hours of Tuesday.
. . .

4 April 2015: a landmark in the search for the truth about the Greek debt
by Éric Toussaint, April 6
Committee for the Abolition of Third World Debt, CADTM

For the first time in Europe a committee for an audit of the debt
(with citizens’ participation) was set up under the auspices of a
parliament. On Saturday 4 April the president of the Hellenic
parliament Zoe Konstantopoulou opened the first official session
creating a debt audit committee , also called committee for the truth
about the debt.

Zoe Konstantopoulou read the decree establishing the said committee
consisting of Greek and foreign members and defined its essential
mission, namely identifying what part of the Greek debt is illegal,
illegitimate, odious or unsustainable, in other words establishing the
truth about the Greek debt, providing their findings to the Hellenic
parliament, the European parliament, to the national parliaments of
the EU member States as well as to the Greek and international public
opinion. Zoe K. recalled the suffering imposed on the Greek people by
the creditors’ demands.

Next the President of the Republic, Prokopis Pavlopoulos, made a
substantial speech supporting this major initiative. Prime Minister
Alexis Tsipras and some ten other ministers were also present.
. . .
Afterwards three members of the auditing committee took the floor,
namely Cephas Lumina, former United Nations Independent Expert on the
effects of foreign debt on the full enjoyment of all human rights;
Margot Salomon, Director of the Centre for the Study of Human Rights
at the London School of Economics, and Maria Lucia Fattorelli, former
member of the committee auditing the debt of Ecuador and Coordinator
of the Citizen Debt Audit-Brazil.

The whole session, that lasted from 2 p.m. to 7.45 p.m., was broadcast
live on the Hellenic parliament television channel, which is steadily
winning more viewers in the country. The audit committee will continue
its investigation on Sunday, Monday and Tuesday...

Interview with Eric Toussaint for Dialogos Radio
6 April by Michael Nevradakis, 20 minutes

text of interview: <http://cadtm.org/In-Greece-New-Commission-Will>
Eric Toussaint’s speech 4th April 2015 – Hellenic parliament

The Committee will audit the Greek debt in the coming months, aimed at
finding out whether part of the Greek public debt is illegitimate,
illegal, odious or unsustainable.

Without claiming to be exhaustive, one can propose the following definitions:

- Illegitimate public debt: debt that was contracted by a government
without considering the public interest, a debt contracted in favour
of a privileged minority.

- Illegal debt: debt contracted in violation of the current legal or
constitutional system.

- Odious public debt: granted on conditions that violate fundamental
human rights (the social, economic, cultural, civic, and political
rights of the people).

- Unsustainable public debt: debt that can only be paid back with dire
consequences for the people such as a dramatic degradation of their
living conditions, of access to health care or education, an increase
in unemployment.

In short, debt that undermines basic human rights.

In other words, an unsustainable debt is a debt whose repayment makes
it impossible for governments to guarantee to the population
fundamental human rights (good public health system, good public
educational system, good social protection system, decent wages and
pensions, etc.)

Paragraph 9 of Article 7 of Regulation No 472/2013 of the European
Parliament and of the Council of 21 May 2013 (which strongly
undermines the sovereignty of the member States that have to implement
adjustment policies) maintains that States subject to structural
adjustment should carry out a complete audit of public debt in order
to explain why indebtedness increased so sharply and to identify any
irregularities. Here is the text in full: “A Member State subject to a
macroeconomic adjustment programme shall carry out a comprehensive
audit of its public finances in order, inter alia, to assess the
reasons that led to the building up of excessive levels of debt as
well as to track any possible irregularity”. [1]

Citizen participation is fundamental to a rigorous and independent
audit process.

Here are some key questions that could be tackled by auditing the Greek debt.

Greek debt was at 113% of GDP in 2009 before the onset of the Greek
crisis and the intervention by the IMF and the European institutions
involved in the Memorandum reached 175% of GDP in 2014. How could we
explain that? Are there irregularities in the huge increase of the

The audit will analyse the legality and legitimacy of the so-called
bail-out process.

Is it in conformity with European treaties (especially Article 125 of
the Treaty on the Functioning of the EU, which prohibits EU countries
from taking on the financial engagements of another EU country)?

Did it comply with normal EU decision making procedure?

Did the public lenders in 2010 (the 14 EU countries that granted
Greece EUR53 billion of loans, the IMF, the ECB, the European
Commission etc.) respect the full consent of the borrower, Greece, or
was Greece acting under coercion?

Did these creditors impose one-sided conditions such as excessive
interest rates on the loans? [2]

Did the 14 EU member States that each granted Greece a bilateral loan
respect their own laws and constitutions, as well as those of Greece?

Another purpose is to audit the actions of the IMF. We know that at
the IMF Executive Board meeting of 9 May 2010 several members of the
IMF Executive Board (the Brazilian, the Swiss, the Argentine, the
Indian, the Chinese members) had expressed considerable reservations
regarding the loan granted by the IMF, pointing out, among other
things, that Greece would not be able to repay it due to the policies
that were being imposed on the country. [3]

Recently, Paulo Nogueira Batista, one of the IMF’s executive
directors, claims that all IMF board members knew that the loan was
actually intended to save the French and German banks not Greece. [4]

Philippe Legrain, advisor to the President of the European Commission
José Manuel Barroso in 2010 when the Troika granted its loan,
specifies that ‘IMF decision makers were overruled by the IMF Managing
Director of the time, Dominique Strauss-Kahn, who was then running for
the French presidency and consequently wanted to prevent French banks
from facing losses. Similarly German banks had persuaded Angela Merkel
that it would be terrible if ever they should lose money. So the
Eurozone governments decided to pretend that Greece was only facing
temporary problems.’ They had to bypass ‘an essential principle in the
Maastricht Treaty, namely the no-bail out clause. The loans to Athens
were not intended to save Greece but the French and German banks that
had been foolish enough to grant loans to an insolvent State.’

Private European banks were thus replaced by the Troika as Greece’s
main creditor as from late 2010.

Has the ECB respected its mandate?

The audit must also evaluate whether the strict conditions imposed on
Greece by the Troika in exchange for the loans it received has
respected their international human rights obligations - such as the
right to health care, to education, housing, social security, to a
fair wage, and also freedom of association and collective bargaining.

These rights are protected by a range of conventions or other
instruments at international and European level, such as the Charter
of Fundamental Rights of the European Union, the European Convention
on Human Rights, the European Social Charter, the two UN Human Rights
Covenants, the UN Charter, the UN Convention on the Rights of the
Child, the UN Convention on the Rights of Persons with Disabilities,
and also the basic conventions of the International Labour
Organisation (ILO).

The audit will need to verify whether, as provided for in Regulation
(EU) No. 472/2013 of the European Parliament and the Council of 21
May, 2013, mentioned above, “The draft macroeconomic adjustment
programme… fully observe[s] Article 152 TFEU and Article 28 of the
Charter of Fundamental Rights of the European Union.” The audit must
also verify whether the following passage of the Regulation is adhered
to: “The budgetary consolidation efforts set out in the macroeconomic
adjustment programme shall take into account the need to ensure
sufficient means for fundamental policies, such as education and
health care.” It must also be determined whether the following
fundamental principle of the Regulation has been applied: “Article 9
of the Treaty on the Functioning of the European Union (TFEU) provides
that, in defining and implementing its policies and activities, the
Union is to take into account requirements linked to the promotion of
a high level of employment, the guarantee of adequate social
protection, the fight against social exclusion, and a high level of
education, training and protection of human health.”

There are also 3 conditions proposed to define an odious debt
 lack of consent;
 lack of benefit to the population;
 awareness of the lenders.

Conclusions: The Committee will audit the Greek debt in the coming
months, aimed at finding out whether part of the Greek public debt is
illegitimate, illegal, odious or unsustainable...

> On Mon, Mar 30, 2015 at 12:45 PM, Dayne Goodwin <daynegoodwin at gmail.com> wrote:
>  . . .
>> In case of illegitimate debts creditors can be contravened
>> <http://www.internationalviewpoint.org/spip.php?article3931>
>> by Éric Toussaint, March 21, 2015
>> . . .
>> Greece: Radical Eric Toussaint to audit Greek debt
>> <http://links.org.au/node/4347>
>> LINKS International Journal of Socialist Renewal
>> by Eric Toussaint, March 21
>> . . .
>> Madame Lagarde, Herr Junker, you do not adhere to your own commitments!
>> by Renaud Vivien, March 5
>> <http://cadtm.org/Madame-Lagarde-Herr-Junker-you-do>
>> Committee for the Abolition of Third World Debt (CADTM)
>> <http://cadtm.org/English>
>> . . .

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