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The Restructuring, Audit, Suspension and Abolition of the Debt By Eric Toussaint and Maud Bailly

Eric Toussaint is a historian and political scientist who holds a Ph.D. from the universities of Paris VIII and Liège. He is the Spokesman for CADTM International (www.cadtm.org) where he has been active for many years in the struggles for the abolition of the debts of the Southern countries and the illegitimate debts of the Northern countries. He was member of Ecuador’s debt audit committee (CAIC) created in 2007 by the President Rafael Correa and during the same year advised the Ecuadorian President and Minister of Finance on the creation of the Bank of the South. He also advised the UN secretariat on the same question in 2008. In the same year Fernando Lugo, President of Paraguay, called on his experience to launch an audit of his country’s public debt.

He supports and is involved in the different initiatives for popular debt audits in Greece, Portugal, Spain, France and Belgium. In 2011 he was consulted by the Brazilian Parliamentary Congress Inquiry on the debt (CPI) and in 2013 by the Brazilian Senatorial economic commission. In 2012 and 2013 he participated, with Alexis Tsipras, the President of Syriza, in discussions on Greek debt. In November 2014, he was a guest of the presidential majority in the Argentine congress, eager to start the audit process provided for in the “Sovereign payments” law adopted in September 2014. Since April 2015, Eric Toussaint is the Scientific coordinator of the Truth Committee on the Greek Public Debt set up by the President of the Hellenic Parliament. Eric Toussaint is the author of several reference works on debt problems and the International Financial Institutions and has edited two popular audit manuals. His latest work in English, Bankocracy, will appear in July 2015.

According to Eric Toussaint, debt restructuring has always been the result of economic and geopolitical calculation, rarely producing a favourable long-term outcome for the debtors; unless the creditors saw a strategic advantage for themselves in it. Sovereign debt“restructuring”, as it is now called by the IMF, the Paris Club and the big banking corporations, and more recently by the left in Greece, Portugal and Spain, is not a satisfactory expression, in fact using the actual term “restructuring” is dangerous, because the creditors have loaded it with what they want it to mean. The spokesman for CADTM International recommends that progressive governments place great importance on carrying out comprehensive debt audits (with popular participation), linked where necessary to suspension of payments. This audit must lead to the abolition of the part of the debt that is illegal, illegitimate, odious and/or ubsustainable and to imposing a reduction on the amount of the remainder. This remainder may be restructured, but in no way can a restructuring be considered, by itself, sufficient.

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