[Marxism] Fwd: "Odious Debt" Has Finally Arrived: Greece To Write Off "Illegal" Debt

Dayne Goodwin daynegoodwin at gmail.com
Fri Apr 10 15:01:16 MDT 2015

Why should the Greek debt be audited?
by Éric Toussaint, CADTM*
. . .
Here are some key points that could be revealed by carrying out an audit.

Greek debt, which was at 113% of GDP in 2009 before the onset of the
Greek crisis and the intervention by the Troika, which now holds 4/5
of total debt, reached 175% of GDP in 2014. We therefore see that the
Troika intervention was followed by a very considerable increase in
Greek debt.

Between 2010 and 2012, the loans that the Troika granted to Greece
were very largely used to repay its most important creditors at that
time, mainly the private banks of the principal European economies,
starting with the French and German banks. [4]. In 2009, some 80% of
Greek public debt was held by the private banks of seven EU countries.
Fifty percent was held by French and German banks alone. In a recent
ARTE documentary [5]

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. [6] 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

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.’

Auditing the Greek debt will show that European private banks greatly
increased their loans to Greece between the end of 2005 and 2009 (they
went from €80 billion to €140 billion, a €60 billion increase) not
taking any account of the State’s actual insolvency. Moreover their
loans were at very low interest rates (0.35% for three-month loans and
4.5% for 10 years in October 2009 [7] whereas the average rate for
German bonds at the same time was about 3.3%). [8]. Banks were
foolhardy, convinced as they rightly were that European bodies would
bail them out in any case.

As previously mentioned, an audit will show that the so-called
bail-out of Greece set up by the European institutions with assistance
from the IMF, has in fact enabled the banks of some European countries
with a decisive influence on European institutions to continue
collecting debt repayments while at the same time transferring the
risk to the Member States through the Troika. It is not Greece that
has been saved, but a handful of big private banks mainly based in the
strongest countries of the EU.
. . .
   _   _   _   _   _   _   _
*Éric Toussaint, Senior Lecturer at the University of Liège, is
president of CADTM Belgium (Committee for the Abolition of Third-World
<http://cadtm.org/English>, and a member of the Scientific Committee
of ATTAC France. He is the author, with Damien Millet, of “AAA. Audit
Annulation Autre politique”, Seuil, Paris, 2012 and of “Debt, the IMF,
and the World Bank, Sixty Questions, Sixty Answers”, Monthly Review
Press, New York, 2010. He has published extensively in this field. He
is a member of the Fourth International leadership.

On Wed, Apr 8, 2015 at 2:05 PM, Louis Proyect via Marxism
<marxism at lists.csbs.utah.edu> wrote:
> http://www.zerohedge.com/news/2015-04-08/odious-debt-has-finally-arrived-greece-write-illegal-debt

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