Category Archives: Law in the service of global justice

Greece: Truth Committee on Public Debt – Preliminary Report

Truth Committee on Public Debt
 
Preliminary report
 
 
The Truth Committee on Public Debt (Debt Truth Committee) was established on April 4, 2015, by a decision of the President of the Hellenic Parliament, Ms Zoe Konstantopoulou, who confided the Scientific Coordination of its work to Dr. Eric Toussaint and the cooperation of the Committee with the European Parliament and other Parliaments and international organizations to MEP Ms Sofia Sakorafa.
 
Members of the Committee have convened in public and closed sessions, to produce this preliminary report, under the supervision of the scientific coordinator and with the cooperation and input of other members of the Committee, as well as experts and contributors.
 
The preliminary report chapters were coordinated by:
 
Bantekas Ilias
Contargyris Thanos
Fattorelli Maria Lucia
Husson Michel
Laskaridis Christina
Marchetos Spyros
Onaran Ozlem
Tombazos Stavros
Vatikiotis Leonidas
Vivien Renaud
 
With contributions from:
Aktypis Héraclès
Albarracin Daniel
Bonfond Olivier
Borja Diego
Cutillas Sergi
Gonçalves Alves Raphaël
Goutziomitros Fotis
Kasimatis Giorgos
Kazakos Aris
Lumina Cephas
Mitralias Sonia
Saurin Patrick
Sklias Pantelis
Spanou Despoina
Stromblos Nikos
Tzitzikou Sofia
 
The authors are grateful for the advice and input received from other members of the Truth Committee on Public Debt as well as other experts, who contributed to the Committee’s work during the public sessions and hearings and the closed or informal consultations.
 
The authors are grateful for the valuable assistance of Arnaoutis Petros Konstantinos, Aronis Charalambos, Bama Claudia, Karageorgiou Louiza, Makrygianni Antigoni and Papaioannou Stavros.
 
 
Executive Summary
 
In June 2015 Greece stands at a crossroads of choosing between furthering the failed macroeconomic adjustment programmes imposed by the creditors or making a real change to break the chains of debt. Five years since the economic adjustment programme began, the country remains deeply cemented in an economic, social, democratic and ecological crisis. The black box of debt has remained closed, and until a few months ago no authority, Greek or international, had sought to bring to light the truth about how and why Greece was subjected to the Troika regime. The debt, in the name of which nothing has been spared, remains the rule through which neoliberal adjustment is imposed, and the deepest and longest recession experienced in Europe during peacetime.
 
There is an immediate democratic need and social responsibility to address a range of legal, social and economic issues that demand proper consideration. In response, the President of the Hellenic Parliament established the Truth Committee on Public Debt (Debt Truth Committee) in April 2015, mandating the investigation into the creation and the increase of public debt, the way and reasons for which debt was contracted, and the impact that the conditionalities attached to the loans have had on the economy and the population. The Truth Committee has a mandate to raise awareness of issues pertaining to the Greek debt, both domestically and internationally, and to formulate arguments and options concerning the cancellation of the debt.
 
The research of the Committee presented in this preliminary report sheds light on the fact that the entire adjustment programme, to which Greece has been subjugated, was and remains a politically orientated programme. The technical exercise surrounding macroeconomic variables and debt projections, figures directly relating to people’s lives and livelihoods, has enabled discussions around the debt to remain at a technical level mainly revolving around the argument that the policies imposed on Greece will improve its capacity to pay the debt back. The facts presented in this report challenge this argument.
 
All the evidence we present in this report shows that Greece not only does not have the ability to pay this debt, but also should not pay this debt first and foremost because the debt emerging from the Troika’s arrangements is a direct infringement on the fundamental human rights of the residents of Greece. Hence, we came to the conclusion that Greece should not pay this debt because it is illegal, illegitimate, and odious.
 
It has also come to the understanding of the Committee that the unsustainability of the Greek public debt was evident from the outset to the international creditors, the Greek authorities, and the corporate media. Yet, the Greek authorities, together with some other governments in the EU, conspired against the restructuring of public debt in 2010 in order to protect financial institutions. The corporate media hid the truth from the public by depicting a situation in which the bailout was argued to benefit Greece, whilst spinning a narrative intended to portray the population as deservers of their own wrongdoings.
 
Bailout funds provided in both programmes of 2010 and 2012 have been externally managed through complicated schemes, preventing any fiscal autonomy. The use of the bailout money is strictly dictated by the creditors, and so, it is revealing that less than 10% of these funds have been destined to the government’s current expenditure.
 
This preliminary report presents a primary mapping out of the key problems and issues associated with the public debt, and notes key legal violations associated with the contracting of the debt; it also traces out the legal foundations, on which unilateral suspension of the debt payments can be based. The findings are presented in nine chapters structured as follows:
 
Chapter 1, Debt before the Troika, analyses the growth of the Greek public debt since the 1980s. It concludes that the increase in debt was not due to excessive public spending, which in fact remained lower than the public spending of other Eurozone countries, but rather due to the payment of extremely high rates of interest to creditors, excessive and unjustified military spending, loss of tax revenues due to illicit capital outflows, state recapitalization of private banks, and the international imbalances created via the flaws in the design of the Monetary Union itself. Adopting the euro led to a drastic increase of private debt in Greece to which major European private banks as well as the Greek banks were exposed. A growing banking crisis contributed to the Greek sovereign debt crisis. George Papandreou’s government helped to present the elements of a banking crisis as a sovereign debt crisis in 2009 by emphasizing and boosting the public deficit and debt.
 
Chapter 2, Evolution of Greek public debt during 2010-2015, concludes that the first loan agreement of 2010, aimed primarily to rescue the Greek and other European private banks, and to allow the banks to reduce their exposure to Greek government bonds.
 
Chapter 3, Greek public debt by creditor in 2015, presents the contentious nature of Greece’s current debt, delineating the loans’ key characteristics, which are further analysed in Chapter 8.
 
Chapter 4, Debt System Mechanism in Greece reveals the mechanisms devised by the agreements that were implemented since May 2010. They created a substantial amount of new debt to bilateral creditors and the European Financial Stability Fund (EFSF), whilst generating abusive costs thus deepening the crisis further. The mechanisms disclose how the majority of borrowed funds were transferred directly to financial institutions. Rather than benefitting Greece, they have accelerated the privatization process, through the use of financial instruments.
 
Chapter 5, Conditionalities against sustainability, presents how the creditors imposed intrusive conditionalities attached to the loan agreements, which led directly to the economic unviability and unsustainability of debt. These conditionalities, on which the creditors still insist, have not only contributed to lower GDP as well as higher public borrowing, hence a higher public debt/GDP making Greece’s debt more unsustainable, but also engineered dramatic changes in the society, and caused a humanitarian crisis. The Greek public debt can be considered as totally unsustainable at present.
 
Chapter 6, Impact of the “bailout programmes” on human rights, concludes that the measures implemented under the “bailout programmes” have directly affected living conditions of the people and violated human rights, which Greece and its partners are obliged to respect, protect and promote under domestic, regional and international law. The drastic adjustments, imposed on the Greek economy and society as a whole, have brought about a rapid deterioration of living standards, and remain incompatible with social justice, social cohesion, democracy and human rights.
 
Chapter 7, Legal issues surrounding the MoU and Loan Agreements, argues there has been a breach of human rights obligations on the part of Greece itself and the lenders, that is the Euro Area (Lender) Member States, the European Commission, the European Central Bank, and the International Monetary Fund, who imposed these measures on Greece. All these actors failed to assess the human rights violations as an outcome of the policies they obliged Greece to pursue, and also directly violated the Greek constitution by effectively stripping Greece of most of its sovereign rights. The agreements contain abusive clauses, effectively coercing Greece to surrender significant aspects of its sovereignty. This is imprinted in the choice of the English law as governing law for those agreements, which facilitated the circumvention of the Greek Constitution and international human rights obligations. Conflicts with human rights and customary obligations, several indications of contracting parties acting in bad faith, which together with the unconscionable character of the agreements, render these agreements invalid.
 
Chapter 8, Assessment of the Debts as regards illegitimacy, odiousness, illegality, and unsustainability, provides an assessment of the Greek public debt according to the definitions regarding illegitimate, odious, illegal, and unsustainable debt adopted by the Committee.
 
Chapter 8 concludes that the Greek public debt as of June 2015 is unsustainable, since Greece is currently unable to service its debt without seriously impairing its capacity to fulfill its basic human rights obligations. Furthermore, for each creditor, the report provides evidence of indicative cases of illegal, illegitimate and odious debts.
 
Debt to the IMF should be considered illegal since its concession breached the IMF’s own statutes, and its conditions breached the Greek Constitution, international customary law, and treaties to which Greece is a party. It is also illegitimate, since conditions included policy prescriptions that infringed human rights obligations. Finally, it is odious since the IMF knew that the imposed measures were undemocratic, ineffective, and would lead to serious violations of socio-economic rights.
 
Debts to the ECB should be considered illegal since the ECB over-stepped its mandate by imposing the application of macroeconomic adjustment programmes (e.g. labour market deregulation) via its participation in the Troika. Debts to the ECB are also illegitimate and odious, since the principal raison d’etre of the Securities Market Programme (SMP) was to serve the  interests of the financial institutions, allowing the major European and Greek private banks to dispose of their Greek bonds.
 
The EFSF engages in cash-less loans which should be considered illegal because Article 122(2) of the Treaty on the Functioning of the European Union (TFEU) was violated, and further they breach several socio-economic rights and civil liberties. Moreover, the EFSF Framework Agreement 2010 and the Master Financial Assistance Agreement of 2012 contain several abusive clauses revealing clear misconduct on the part of the lender. The EFSF also acts against democratic principles, rendering these particular debts illegitimate and odious.
 
The bilateral loans should be considered illegal since they violate the procedure provided by the Greek constitution. The loans involved clear misconduct by the lenders, and had conditions that contravened law or public policy. Both EU law and international law were breached in order to sideline human rights in the design of the macroeconomic programmes. The bilateral loans are furthermore illegitimate, since they were not used for the benefit of the population, but merely enabled the private creditors of Greece to be bailed out. Finally, the bilateral loans are odious since the lender states and the European Commission knew of potential violations, but in 2010 and 2012 avoided to assess the human rights impacts of the macroeconomic adjustment and fiscal consolidation that were the conditions for the loans.
 
The debt to private creditors should be considered illegal because private banks conducted themselves irresponsibly before the Troika came into being, failing to observe due diligence, while some private creditors such as hedge funds also acted in bad faith. Parts of the debts to private banks and hedge funds are illegitimate for the same reasons that they are illegal; furthermore, Greek banks were illegitimately recapitalized by tax-payers. Debts to private banks and hedge funds are odious, since major private creditors were aware that these debts were not incurred in the best interests of the population but rather for their own benefit. The report comes to a close with some practical considerations.
 
Chapter 9, Legal foundations for repudiation and suspension of the Greek sovereign debt, presents the options concerning the cancellation of debt, and especially the conditions under which a sovereign state can exercise the right to unilateral act of repudiation or suspension of the payment of debt under international law. Several legal arguments permit a State to unilaterally repudiate its illegal, odious, and illegitimate debt. In the Greek case, such a unilateral act may be based on the following arguments: the bad faith of the creditors that pushed Greece to violate national law and international obligations related to human rights; preeminence of human rights over agreements such as those signed by previous governments with creditors or the Troika; coercion; unfair terms flagrantly violating Greek sovereignty and violating the Constitution; and finally, the right recognized in international law for a State to take countermeasures against illegal acts by its creditors, which purposefully damage its fiscal sovereignty, oblige it to assume odious, illegal and illegitimate debt, violate economic self-determination and fundamental human rights. As far as unsustainable debt is concerned, every state is legally entitled to invoke necessity in exceptional situations in order to safeguard those essential interests threatened by a grave and imminent peril. In such a situation, the State may be dispensed from the fulfilment of those international obligations that augment the peril, as is the case with outstanding loan contracts. Finally, states have the right to declare themselvesunilaterally insolvent where the servicing of their debt is unsustainable, in which case they commit no wrongful act and hence bear no liability.
 
People’s dignity is worth more than illegal, illegitimate, odious and unsustainable debt.
 
Having concluded its preliminary investigation, the Committee considers that Greece has been and still is the victim of an attack premeditated and organized by the International Monetary Fund, the European Central Bank, and the European Commission. This violent, illegal, and immoral mission aimed exclusively at shifting private debt onto the public sector.
 
Making this preliminary report available to the Greek authorities and the Greek people, the Committee considers to have fulfilled the first part of its mission as defined in the decision of the President of the Hellenic Parliament of 4 April 2015. The Committee hopes that the report will be a useful tool for those who want to exit the destructive logic of austerity and stand up for what is endangered today: human rights, democracy, peoples’ dignity, and the future of generations to come.
 
In response to those who impose unjust measures, the Greek people might invoke what Thucydides mentioned about the constitution of the Athenian people: “As for the name, it is called a democracy, for the administration is run with a view to the interests of the many, not of the few” (Pericles’ Funeral Oration, in the speech from Thucydides’ History of the Peloponnesian War).

Constructing the secret EU state: “Restricted” and “Limite” documents hidden from view by the Council

Constructing the secret EU state: “Restricted” and “Limite” documents hidden from view by the Council
http://www.statewatch.org/analyses/no-240-restricted-documents.pdf

– Over 117,000 “RESTRICTED” documents produced or handled by the Council since 2001 but only 13,184 are listed in its public register of documents

– 103,839 “RESTRICTED” documents not listed in the Council’s public register due to the “originators” right of veto?

– The Council seeks to stop the publication of unreleased “LIMITE” documents, which are defined as “sensitive unclassified documents”

– The Commission has failed to implement the Lisbon Treaty to ensure that all legislative documents are made public as they are produced  – this means that 60% of Council documents relating to legislative decision-making  are made public after “the final adoption” of measures

– The Council uses Article 4.3, the “space to think”, to refuse access to 50% of requests for access to legislative documents under discussion

Tony Bunyan, Statewatch Director, comments:

“The Council have constructed a two-tier system of secrecy to keep from public view thousands and thousands of documents. This has been compounded by the failure of the European Commission to put forward proposals to implement the provision in the Lisbon Treaty to make all documents concerning the legislative procedure public.

In place of the need to deepen democratic openness and accountability in EU the Council has entrenched a system of secrecy based on its discretion to decide whether and when to make documents public.

The result is that the European legislature – the Council of the European Union and the European Parliament – meet in secret trilogues to decide over 80% of new laws going through the EU.”

Judicial Efforts to Combat Inhumane Conditions of Existence

Draft Declaration on Judicial Efforts to Combat
Inhumane Conditions of Existence


“A Stable and Just Global Order Requires that Effective Remedies be Secured to Victims of Economic Oppression?


About one fifth of humankind, over one billion human beings, lives in conditions hardly fit for animals. Such conditions are designated as inhumane conditions of existence. They may include a chronic lack of basic resources to maintain human dignity, including the lack of adequate food, clean water, basic health resources, shelter, sanitation, education and safety.  Such conditions are not the result of fate but of human agency, of acts of omission and commission, neglect, complacency, wilful blindness, recklessness and malice.

Yet, states have agreed to respect in all circumstances minimal norms of humanity, both as a general principle and through the adoption of detailed prescriptions.  The general principle is the absolute prohibition of inhumane and degrading treatment, a rule of customary international law enshrined in human rights treaties and in international humanitarian law. The minimal standards of humanity contained in the Standard Minimum Rules for the Treatment of Prisoners, adopted by ECOSOC in 1957, and in the Third Geneva Convention applicable to Prisoners of War, contain detailed specifications regarding basic resources to which prisoners are entitled in order to maintain their humanity. The existence of such detailed specifications concerning food, water, shelter, clothing, bedding, sanitation, health, access to culture and recreation, demonstrate the recognition by states of an obligation to secure, even to convicted murderers, humane conditions of existence.  

The recognition and fulfilment of basic human entitlements to life in dignity, framed in the language of rights and obligations, is the foundation of every civilized society.  Securing procedural rights to every person, including the right to petition judicial authorities, is based on the need to empower individuals in modern, urban societies with legal protection against abuse of administrative and economic power as well as on the democratic principle that no person should be compelled to rely on arbitrary benevolence of the powerful.

The process of globalisation, which entails increased international flows of ideas, people, products and capital across traditional national borders, is threatening the fledgling regime of human rights protection that relies on states? capacities to regulate economic life. At the same time, powerful global actors, who are not parties to human rights treaties and do not possess specific obligations to the human person, use states as means to deregulate ? to their advantage ? the global market place.  The compound nature of these processes threatens to subject the well-being and sometimes the very survival of large populations to the mercy of blind market forces. There is a pressing need to balance this development by strengthening the procedural capacity of individuals and groups to assert their economic rights at the national, regional and international level and to deter, through penal sanctions, the adoption of policies whose intent or foreseeable effect is to cause vast zones of destitution.  Governments of national states continue to remain, individually and jointly, the main actors responsible for securing human rights to everyone.

Consequently, we undersigned, make the following Declaration

1.  Every person is entitled to an existence in dignity by virtue of being a human being.

2.  The entitlement of dignified human existence is a social predicate, which necessarily places obligations on others. By virtue of their power to affect economic and social conditions, states, corporations and international organisations are under a standing moral duty to take into consideration the effects of their acts and policies on the enjoyment by individuals of their right to existence in dignity.

3. States are under the duty to prohibit, suppress and repress acts of inhumane treatment, including measures that subject human beings to inhumane or degrading conditions of existence or to perpetuate such conditions. This obligation requires of states and international organisations to consciously refrain from adopting policies which are likely to cause or perpetuate inhumane or degrading conditions of existence within or outside their own jurisdiction.

4. A second obligation, enshrined as a pledge in the UN Charter, extends to the duty of states to promote human rights, including by soliciting or providing international assistance. This obligation extends not only to the provision and acceptance of aid, but equally to other policies pursued by states, including policies in the fields of trade, investment, finance, and disarmament which affect economic and social conditions   States who, without justification, divert scarce funds to harmful, dangerous, unlawful or capricious projects, may violate their international pledge to promote human rights and economic well-being.

5.  Persons compelled to live in inhumane conditions, either directly or as a result of the adoption of socially regressive policies by their own state, by other states or by international organisations, are effectively denied the enjoyment of their fundamental rights. They are designated herein as victims of economic oppression.

6. Victims of economic oppression are entitled to remedies which may include rehabilitation, restitution, compensation, the determination of the truth regarding the causes for their victimization and/or the punishment of offenders.

7.  In order to secure the rights of victims of economic oppression and deter such oppression, states must provide potential victims with effective means to assert, claim and access remedies. One means towards this objective is the widespread adoption by UN member states of an Additional Protocol to the International Covenant on Economic, Social and Cultural Rights.

8.  Policies adopted and pursued with the intent or knowledge that they will subject a civilian population to inhumane conditions of existence or perpetuate such conditions, with the effect of causing increased morbidity and mortality rates, are designated as the international crime of economic oppression.  The Contracting Parties to the Statute of the International Criminal Court are urged to include economic oppression as one of the crimes against humanity under the jurisdiction of the Court.

9.  International civil society and organisations in the fields of human rights, development and global justice, are urged to endorse this Declaration, publicize it and press for the adoption of the proposed measures by states and international organisations.

Essay on Causation

In this Essay, Professor Matsuda argues that the narrow dyadic focus of tort law perpetuates very real, and remediable, social harms. Using tort causation doctrine as her starting point, Professor Matsuda demonstrates how the tort system sacrifices human bodies to maintain the smooth flow of the economic system. Time after time, tragedies  occur: school systems fail, first graders shoot each other, women live in constant fear of rape. Yet each tragedy  is met with the same systematic response: those without resources, those least able to correct the harm, are considered  the legal cause of the harm. The economic and corporate interests that created the structure in which these tragedies  occurred are absolved of legal and moral responsibility. Professor Matsuda proposes two changes to this system:  First, when determining legal cause, we must expand tort liability in consideration of the ability of defendants  to avoid, prevent, and redress social harm. Second, we must exchange our egocentric notion of responsibility for  a communal and connected understanding of social responsibility. For instance, when I walk over a homeless man  on my way to law school, I must recognize that it is not just a social failing that caused his plight; it is a  personal failing on my part. Professor Matsuda argues that we exist in, and benefit from, a society that makes  his position possible, and under current understandings of responsibility, even inevitable.

Columbia Law Review 100 (2000): 2195.

ESSAY: ON CAUSATION
Mari Matsuda*


These words are written in difficult times. We may choose, now, to join in the celebration of what some describe  as unprecedented prosperity, a growth curve without a horizon, spurred by technology that responds with friendly  efficiency to our mouse clicks. Or, we can spoil the party. We can speak of the unspeakable human pain that goes  on outside the banquet halls. As I sat to write this lecture,[1] a sick knot of tension lodged in my stomach. If  I were a violent person, I might have felt the urge to hit someone. Instead, I am a gardener, and I did the only  thing I know to do with that knot in my gut. I went to shovel manure.

At the stables in Rock Creek Park, people rent stalls for horses and when the stalls are shoveled out, mountains  form for hauling away. I [Page 2196] shoveled and bagged pungent gold for my garden until I was breathing hard.  As the knot in my stomach gave way to work, this lecture took shape in my head and I looked up to see a cheery  sign on the oversized dumpster at my side: "Pine View Hauling