Terms of reference for the Hellenic Parliament’s Truth Committee on Public Debt

21 May 2015 by Truth Committee on the Greek Public Debt

Background

Since May 2010, Greece has been implementing a macroeconomic adjustment programme as a condition for accessing loans from the International Monetary Fund IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org
, European Commission and European Central Bank Central Bank The establishment which in a given State is in charge of issuing bank notes and controlling the volume of currency and credit. In France, it is the Banque de France which assumes this role under the auspices of the European Central Bank (see ECB) while in the UK it is the Bank of England.

ECB : http://www.bankofengland.co.uk/Pages/home.aspx
to help it reduce its budget deficit. The programme consists of policy measures that involve deep public spending cuts, public sector job cuts, tax increases, privatization and structural reforms that are apparently aimed at reducing the country’s fiscal deficit and public debt to sustainable levels. However, these internationally recommended measures have pushed the economy into deep recession (the longest experienced in Europe at a time of peace) and millions of Greeks into poverty, unemployment and social exclusion, while grossly undermining the enjoyment of human rights, particularly economic and social rights and the function of public services and infrastructures (schools, hospitals, courts around the country have been closed down or merged in order to secure cuts in public expenses).

In response to this situation and within the framework of the Parliament’s responsibility to the Greek people, on 4 April 2015, the President of the Hellenic Parliament decided to establish a Special Committee of the Greek Parliament to investigate the truth about the creation and the increase of the public debt, the Auditing of the Debt and the promotion of the Hellenic Parliament’s international cooperation with the European Parliament and the Parliaments of other countries and with International Organizations in matters of debt, in order to address the range of legal, social and economic issues that demand proper consideration and raise awareness of the Greek population, the international community and the international public opinion (“The Truth Committee on Public Debt”).

This decision was taken pursuant to Articles 49, 162 par. 4 and 5 and 162 A of the Regulation of the Hellenic Parliament, (Parliamentary Part Government Gazette 106 /A /87) as applicable and Articles 98 and 164F of the Regulation of the Hellenic Parliament, (Part II Government Gazette 51/ A/1997) as applicable. It is also in line with Regulation (EU) No. 472/2013 of the European Parliament and of the Council of 21 May 2013 on the strengthening of economic and budgetary surveillance of Member States in the euro area experiencing or threatened with serious difficulties with respect to their financial stability, as well as the United Nations Guiding Principles on Foreign Debt and Human Rights (A/HRC/20/23) adopted by the Human Rights Council in July 2012.

Paragraph 9 of Article 7 of Regulation (EU) No. 472/2013 enjoins a Member State subject to a macroeconomic adjustment programme to “carry out a comprehensive audits of its public finances in order, inter alia, to assess the reasons that led to the build-up of excessive levels of debt as well as to track any possible irregularity”. The UN Guiding Principles call upon States to undertake periodic audits of their public debts in order to ensure transparency and accountability in the management of their resources and to inform future borrowing decisions.

Objective

The overall purpose of the audit to be carried out by the Truth Committee on Public Debt is to examine the nature and extent of the country’s public debt, as well as the processes relating to the contracting and/or accumulation of the debt and the impact of the cuts or changes in the provision of public services, programmes and benefits on the human rights and welfare of all people living in Greece in order to identify what part or proportion of the debt can be defined as illegitimate, illegal, odious or unsustainable. The periods covered are the Memoranda period, i.e. from May 2010 until January 2015, as well as the years 1990 – 2010. The audit is also designed to contribute to transparency and accountability in the management of the country’s public finances, to formulate arguments and requests concerning the cancellation of the debt and to ensure that potential future borrowing decisions are reached on the basis of informed consent.

Membership

The Committee shall be comprised of international members and Greek nationals with recognized competence and expertise or experience in the subject matters of the audit, public debt; human rights protection and transparency guarantees Guarantees Acts that provide a creditor with security in complement to the debtor’s commitment. A distinction is made between real guarantees (lien, pledge, mortgage, prior charge) and personal guarantees (surety, aval, letter of intent, independent guarantee). , as well as representatives of the relevant social movements. Members of the Committee will be appointed by the President of the Hellenic Parliament and will not receive any remuneration for their work.

Scope of work

The Committee shall audit the country’s public debt with a particular focus on the agreements, contracts and other means by which debt was acquired, loans were secured and their terms were implemented in order to:

Determine whether irregularities, violations of the constitution or the law and/or other improprieties occurred with respect of the contracting and/or build-up of the debt;
Examine the conditions under which the public debt of Greece grew in the period 1990-2010;
Examine the conditions under which the Memoranda of May 2010 and May 2012 were concluded;
Determine whether and if so which part of the debt can be deemed illegitimate, illegal, odious or unsustainable;
Assess the impact of the conditionality measures under the economic adjustment programme on the human rights and welfare of all people living in Greece.

Timeframe

The Committee’s work was inaugurated during a 4-day public procedure in the Hellenic Parliament (4th – 7th April, 2015). An open invitation was launched for the nomination of members additional to those participating to the founding procedure. An initial framework for working groups and terms of cooperation was discussed during a closed session on April 7, 2015. The requirements of the audit work have been assessed and the implementation of the Committee’s mandate will officially commence with the second meeting of its members on May 4th – 7th 2015 and shall continue its work for such a period as will be required for the carrying out of its mandate. The President of the Hellenic Parliament may determine indicative or mandatory deadlines for aspects of the findings. At the conclusion of its work, the Committee will present a written report to the President. The report shall include an executive summary which should be self-explanatory and should include a summary of findings, conclusions and recommendations. The Committee will present information on its preliminary findings in June 2015.

DEFINITION OF TERMS

In this report, the following terms have the meanings respectively assigned to them hereunder:

“Illegitimate debt”
Debt that the borrower cannot be required to repay because the loan, security or guarantee, or the terms and conditions attached to that loan, security or guarantee infringed the law (both national and international) or public policy, or because such terms or conditions were grossly unfair, unreasonable, unconscionable or otherwise objectionable, or because the conditions attached to the loan, security or guarantee included policy prescriptions that violate national laws or human rights standards, or because the loan, security or guarantee was not used for the benefit of the population or the debt was converted from private (commercial) to public debt under pressure to bailout creditors.

“Illegal debt"
Debt in respect of which proper legal procedures (including those relating to authority to sign loans or approval of loans, securities or guarantees by the representative branch or branches of Government of the borrower State) were not followed, or which involved clear misconduct by the lender (including bribery, coercion and undue influence), as well as debt contracted in violation of domestic and international law or had conditions attached thereto that contravened the law or public policy.

“Odious debt”
Debt, which the lender knew or ought to have known, was incurred in violation of democratic principles (including consent, participation, transparency and accountability), and used against the best interests of the population of the borrower State, or is unconscionable and whose effect is to deny people their fundamental civil, political, economic, social and cultural rights.

“Unsustainable debt”
Debt that cannot be serviced without seriously impairing the ability or capacity of the Government of the borrower State to fulfil its basic human rights obligations, such as those relating to healthcare, education, water and sanitation and adequate housing, or to invest in public infrastructure and programmes necessary for economic and social development, or without harmful consequences for the population of the borrower State (including a deterioration in the living standards). Such debt is payable Payable A sum of money that one person (debtor) or group of people owes to another (creditor). but its payment ought to be suspended in order to allow the state to fulfil its human rights commitments.


Other articles in English by Truth Committee on the Greek Public Debt (17)

0 | 10

Translation(s)

CADTM

COMMITTEE FOR THE ABOLITION OF ILLEGITIMATE DEBT

2 place De Bronckart
4000 - Liège- Belgique

00324 226 62 85
info@cadtm.org

cadtm.org