[P2P-F] Fwd: [recovery_human_face] Launch of Greek debt audit

Sun Apr 12 13:52:42 CEST 2015

Dear Vasilis,

Could you please cover this for our p2p blog ?

many thanks!!

Michel

Eric Toussaint <eric.toussaint4 at gmail.com>,
recoveryhumanface at socpro.list.ilo.org
Betreff: [recovery_human_face] Launch of Greek debt audit

>>> "Eric Toussaint"  2015-04-09T20:38:27.206745 >>>
Dear colleagues,

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 - read more
in our CADTM news.
Best regards,

Éric Toussaint
Senior Lecturer at the University of Liège,
President of CADTM Belgium (Committee for the Abolition of Third-World Debt)

www.cadtm.org/4-April-2015-a-landmark-in-the
Greece
4 April 2015: a landmark in the search for the truth about the Greek debt
by Eric Toussaint
6 April 2015

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.

The President of the Hellenic parliament invited MEP Sofia Sakorafa to take
the floor. She recounted the five year trial of all those who demand an
audit of the debt so as to radically reduce it have been involved in.
Éric Toussaint, Scientific Coordinator of the international team within the
committee summed up some of the questions for which the auditing committee
will seek answers as it investigates the Greek debt.

The following ministers spoke up in turn: the Defence Minister Panos
Kammenos (who is also President of the party of Independent Greeks); the
Minister for Administrative Reforms George Katrougalos; the Minister of
state for the struggle against corruption Panayotis Nikoloudis; the
Minister of justice Nikos Paraskevopoulos; the Minister for European
affairs Nikos Chountis; deputy defence Minister Costas Isychos; Finance
Minister Yannis Varoufakis; the deputy Minister for culture Nikos Xydakis;
the Minister of Infrastructure, Transport and Networks Christos Spirtzis.

The head of the Parliamentary Budget Office Panagiotis Liargkovas and the
head of the Parliamentary Scientific Service Professor Pliakos also spoke.
All mentioned essential elements for a successful auditing of the Greek
debt, and all committed their ministries or departments to actively
supporting the project.

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.
The Sunday session started with jurist Georges Kasamatis’ intervention. It
was broadcast by the Hellenic parliament television channel:
http://www.hellenicparliament.gr/En... https://parltv.live.grnet.gr/webtv/

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:

1. Illegitimate public debt : debt that was contracted by a government
without considering the public interest, a debt contracted in favour of a
privileged minority.
2. Illegal debt : debt contracted in violation of the current legal or
constitutional system.
3. Odious public debt : granted on conditions that violate fundamental
human rights (the social, economic, cultural, civic, and political rights
of the people).
4. 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 debt?

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 €53
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|
. See the revelations made by The Wall Street Journal:
http://blogs.wsj.com/economics/2013... See also:
http://greece.greekreporter.com/201...

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| the revelations made by
The Wall Street Journal: http://blogs.wsj.com/economics/2013... See also:
http://greece.greekreporter.com/201...

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.

Did the ECB has 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.

notes articles:

|1| http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32013R0472

|2| The interest rates imposed in 2010-201 were between 4% and 5.5%. In
2012 they were, after protests (including from the Irish government who was
also asked to pay high interest in 2010), reduced to 1%. Lowering the rate
was a tacit acknowledgement by the 14 States that the interest rates were
too high.

|3| See the revelations made by The Wall Street Journal:
http://blogs.wsj.com/economics/2013/10/07/imf-document-excerpts-disagreements-revealed/
See also:
http://greece.greekreporter.com/2013/10/08/secret-imf-report-shows-greek-bailout-worries/

|4|
http://www.marianne.net/on-renfloue-grece-sauver-les-banques-francaises-allemandes-100231807.html
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