GREECES ODIOUS DEBT PDF
Home · Economics and Finance; Greece's 'Odious' Debt. Greece's 'Odious' Debt PDF, Pages. ISBN: cittadelmonte.info cittadelmonte.info; see also Dave Kansas, Greek Bond Yield Spreads Widen, analyze the odious debt doctrine within the context of Greece's. PDF | This essay suggests that the legal doctrine of odious debt needs a accounting techniques to hide Greece's public debt and keep the.
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Greece's 'odious' debt: the looting of the Hellenic republic by the euro, the . collapse in confidence in the affordability of Greek government debt was so sudden http:cittadelmonte.info cittadelmonte.info "debt") has become wildly popular in Greece since that country has been For a debt to qualify as Odious Debt, three conditions must be. This funding, which came to be known as 'bailout for Greece' was nothing more than . In the first section we analyse the doctrine of 'odious debt'. , available at cittadelmonte.info
This paper reveals that the third Memoranda of Understanding and the August loan-agreement, according to Greek-Parliament Truth Committee on Public Debt are illegal, illegitimate and odious because they fail to recognize the odious character of Greece's existing debt. The purpose of this study is to examine the odious debt concept in Greece. In Greece, the odious debt concept received high attention during recent financial crisis and Greek or Hellenic Parliament decided to establish a Special Committee. The Third MoU and the August loan agreement violate the fundamental human rights of the Greek people both civil and political as well as socio-economic rights as set out in the Greek Constitution and under international law treaty-based and customary. On the other side of results, Greece was a democratic regime during the time it contracted the vast majority of its loans and membership into the Eurozone, which benefitted country by gaining the highly low interest rates that euro currency involved.
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Jason Manolopoulos combines his experience of the global financial system, European politics and Greek society, to explore the economic policies, historical legacy, psychological biases that have shaped an ongoing drama.
He explores the historical legacy and psychological biases that have shaped an ongoing drama. Policy and investment errors bear marked similarities with earlier financial crises — in particular the Exchange Rate Mechanism system and the Argentine debt crisis. Greek society also comes under scrutiny, as shocking details of a kleptocratic political class and a wasteful public sector are revealed.
Manolopoulos traces these developments back to dictatorship and civil war, but argues that there is no excuse for their continuation in a modern democracy. Psychologically insightful and gritty in his practical recommendations, Manolopoulos possesses a knack for chiselled and punchy prose — all of which make the read a pleasurable must.
This book is essential reading for everybody who wants to understand the challenges the Eurozone is facing. Jason Manolopoulos is the co-founder of the emerging markets hedge fund Dromeus Capital, an alternative asset management firm focusing on macro and special situations investments in emerging markets.
From Buenos Aires to Athens; 2. Getting Lucky; 3. The Euro: A Hard Sell, or a Mis-sell? Western Branding, Eastern Legacy: A Country on a Fault-line; 5. The Looting of Greece: Scandals, Corruption and a Monstrous Public Sector; 6. Getting Unlucky: It All Begins to Unravel; 7. The Euro in Practice; 8. Successive primary surpluses have come hand in hand with a constant and unstoppable increase in the relative weight of debt, caused by the collapse of the economy as GPD collapsed, the relative weight of the cumulated stock of debt increased.
In particular, the parliamentary debt committee focused on what was by all accounts the trigger of the Greek fiscal crisis, namely the successive revisions of the deficit figures from the original 3.
The new government revised and increased both the public deficit and debt for in a manner hard to reconcile with both Greek and European law. European authorities, after some initial reticence, ended up accepting the methodology underlying the revisions of the official statistics and indeed revising even higher the deficit estimates at the very same time that the first financial assistance programme was being negotiated. When one company takes control of another company, the acquiring company generally pays a price that is higher than the value of the net assets.
Goodwill generally consists of intangible elements, such as brands, which are evaluated subjectively. By March Greece reached a state of fiscal quasi-asphyxia. One month later, the Hellenic State had been forced out of international lending markets. Two alternatives were left by then: But was it? First, the Greek Statistical Authority revised the figure for arrears in hospital expenditure extending back to from 2. Eurostat originally opposed, but in April it accepted a revision upwards to 6.
Second, the Greek Statistical Authority and Eurostat transferred the liabilities of the non-financial public corporations to the general government in It is important to stress that this group of corporations had been classified as non-financial corporations Non-financial corporations All economic agents that produce non-financial goods and services. They represent the greatest share of productive activity.
There were no changes on this issue in the European statistical methodology between and Moreover, the reclassification took place without carrying out the required studies.
Third, another case of unsubstantiated increase of public debt in is related to the statistical treatment of swaps with Goldman Sachs. This amount was distributed in a rather ad hoc fashion over the four year period between and With the benefit of hindsight, it is hard not to conclude that while the successive revisions of deficit figures were in breach of both Greek and European law, they played a decisive role in persuading Greek and European public opinion that the ultimate and fundamental cause of the Greek fiscal crisis was excessive public spending.
This allowed hiding in plain sight the fact that the Greek crisis was, above all, a crisis triggered by the growth of private debt, a growth which was an intrinsic part of the inbuilt asymmetries of Economic and Monetary Union as actually designed, and in which the financial institutions of core Eurozone states in the Greek case, French and German banks played a fundamental role.
The narrative of the profligate Greek state, while hard to reconcile with facts, was instrumental to popularise acquiescence in order to provide financial support. The Private Sector Involvement. Moreover, those investors holding Greek debt issued under a choice of law other than Greek mainly English law were repaid in full. Greek banks were hit massively, but they were simultaneously recapitalised through the second programme of financial assistance and later privatised, with relevant shares being acquired by international investors.
Consequently, it is unsurprising that the restructuring reduced the stock of debt only marginally. The restructuring of debt in the hands of public institutions, while providing further justification to engage into budgetary balancing policies, did not change one penny the level of public debt, while the haircut imposed on Greek banks resulted in new public liabilities, as the state had to borrow Eurozone and IMF money to immediately recapitalise the banks.
This does not mean, however, that the restructuring was a matter of pure formality. While the debt in the hands of Greek banks was issued under Greek law, the debt that the Greek state contracted to recapitalise the banks was issued under English law.
Greece's 'Odious' Debt - Economics and Finance
States can change at will the conditions under which debt issued under national law is repaid, something that is not the case if the debt is issued under foreign law, especially English law.
The report found that the IMF technical staff made that very clear at the time the decision was taken. The interim report of the debt committee concluded that the debt contracted by Greece as part of the financial assistance programmes was odious, illegal, illegitimate and unsustainable.
As was already pointed out, the debt was converted from private into public debt because of the enormous pressure exerted by creditors.
This has been confirmed by a study conducted by the Berlin-based ESMT European School of Management and Technology that focuses on the analysis of the distribution of bailout funds lent to Greece since The third financial assistance programme is designed to result in a similar pattern. Of a total 86 bn. Thus, creditors, not Greek citizens and residents in Greece, have benefitted from the bailouts.
Lenders acted in ways that they knew would hurt the economy of Greece and would lead to the deterioration of living standards in Greece. Such actions amount to economic coercion. Even if such form of coercion does not invalidate consent to the financial agreements, it may nonetheless offer a basis for denouncing the loan agreement under Article 56 1 b of the Vienna Convention on the Law of Treaties.
The debt committee documented that severe economic coercion was exerted both during the negotiation of debt restructuring and during the days before the July referendum.
[PDF] Greece's 'Odious' Debt: The Looting of the Hellenic Republic by the Euro the Political
In the latter case, European institutional actors multiplied public statements depicting the options open to Greek voters as a matter of either accepting a new financial agreement to which even more draconian conditionalities were attached, or repudiate the agreement and favour financial autarchy, as a vote against the agreement would lead to Greece leaving the Eurozone, the reintroduction of a national currency and the unleashing of a major economic crisis.
Under articles 28 and 36 of the Greek Constitution all international agreements must be ratified formally by parliament subject to special majorities and in any event they cannot violate fundamental rights and liberties. For our present purposes, Article 1 4 of the said law is of essence, because such provision authorised the Greek Minister of Finance to negotiate and sign all the agreements related to the loan and financing agreements including contracts, memoranda of understanding and eventually treaties.
Still, the agreements had to be brought before Parliament so that the standard constitutional procedure of approval and ratification could be followed. By the same token, all pertinent agreements irrespective of their legal nature were declared as producing legal effect upon their signature by the Minister. Article 1 4 of Law foresees a ratification procedure which is clearly in breach of Articles 28 and 36 of the Hellenic Constitution.
Its official role is to ensure price stability by combating inflation within that Zone. The conduct of European institutions is hard to reconcile with the mandates to respect and promote human dignity, freedom and democracy, enshrined in Articles 2 and 3 of the Treaty on European Union and Article 9 of the TFEU, and with their obligation to comply with Article 51 of the European Charter of Fundamental Rights.
The Inter-creditor Agreement of 8 May foresaw that the Commission would require Greece to take measures to reduce its deficit. Even if formally acting on the basis of powers granted by a legal instrument outside EU law, the European Commission should have acted in full compliance with EU law, including, quite obviously, the Charter of Fundamental Rights.
The Greek debt is also illegal because the measures attached to the three loans to Greece in the , and memoranda breached fundamental rights as protected not only under Greek and European law, but also in international treaties to which Greece is a party. The bailout programmes required the Greek government to adopt measures that had major detrimental effects upon the living conditions of all residents in Greece, resulting in the violation of several human rights as protected at the international level.
Finally, Greek sovereign debt is unsustainable. Greece cannot service its debt without seriously impairing its capacity to fulfil its basic fundamental rights obligation.
As it has been shown in both reports of the Committee, several basic fundamental rights enshrined not only in the Greek Constitution and in the Charter of Fundamental Rights of the European Union, but also in international human rights treaties are breached due to a lack of public expenditures in social spending, thus preventing such violations would necessarily imply an increase of public spending.
The massive budgetary primary surpluses that the Hellenic state has to achieve in the next two decades have to be used for the reimbursement of the debt. On such a basis, the Committee concluded that Greek debt is totally unsustainable. V- Conclusion: Doing Things with Odious Debts. We have shown in this article that the range of unconscionable debts encompassed under the umbrella term of odious debt is meaningful in international law.
They are creatures of customary international law, and particularly emanations of opinio juris even absent positive practice , forced to remain in silence and inactivity through a series of incentives or scaremongering engineered by powerful lending states and IFIs. Given that odious debt violates economic self-determination which itself is a collective entitlement that is delegated to a representative of the people typically its government—but exercisable on their behalf and for their benefit —it is evident that it is not subject to the rule of government continuity and succession under international law.
As a result, if a government conspires to transform private debt into sovereign debt, its successor or the people of the country in question is not responsible for the repayment of said debt.
The debt is attributable solely to the persons of the persons that incurred it and not the state. In this sense, the concept of odious debt becomes a claim, or a defence, in favour of the state and its people.
This claim is very much of a substantive nature and may be exercised with a view to the partial or total extinction of the debt, acknowledgment of non-existence declaratory relief , demand for specific performance, or other. The claim is legitimate only if the indebted state has not become unjustifiably richer or the beneficiary of an undue advantage. Where a legitimate odious debt claim is found to exist, it may be declared and acted upon unilaterally.
Wiley Online Library. Lastra and L. Buchheit eds.
Kenadjan, K. Bauer and A. Cahn eds. Rieffel, Restructuring Sovereign Debt: Lienau, Rethinking Sovereign Debt: Esposito, Y. Li and J. Bohoslavsky eds. Wong, Sovereign Finance and the Poverty of Nations: Bohoslavsky and J.
Cernic eds. See A. See the second report of the Truth Committee on Public Debt, released in September , available at http: In fact, as already pointed out, when the government had a change of heart following the referendum of July it decided to disband the parliamentary debt committee, which was the only entity in government describing part of the debt as odious.
Even so, the new generation of bilateral investment treaties BITs , such as the preamble and Art 3 1 of the Norwegian Model BIT insert human rights clauses and investment tribunals recognise the importance of human rights obligations of host states.
See Saluka Investments BV v. Cassese, Self-Determination of Peoples: Horwood v.
Committee for the Abolition of Illegitimate Debt
See R. OpenElement , paras. On conditionality, J. Stiglitz, Globalization and its Discontents Norton, , 44—46 was prescient about the potential uses of conditionality. Once a private bank whose finances are linked to a country is exposed to a toxic non-repaid debt, there is a domino effect on the banking sector and the state in question because of the inter-connectedness of the international private financing system, which in turn sustains the domestic job market, consumer spending and ultimately the availability and collection of taxes.
As a result, lending states not only have a financial interest in the repayment of debt incurred by borrowing states, but may also find it expedient to offset such debt by using it as a political tool in order to achieve financial or political benefits. These ships were of little, or no use, to Ecuador at the time and in the process was saddled with a significant debt.
Much later Norway acknowledged that this project was of no value to Ecuador and its people and went on to unilaterally extinguish the remainder of the debt.
Greece's 'Odious' Debt
Add1, available at http: Report to the Storting, No. See Z. For example, in accordance with Art. Member States are under an obligation to undertake debt audits of their public finances. Such an obligation naturally requires that where an audit reveals serious irregularities in the accumulation of debt, remedial action needs to be taken, lest the obligation is rendered meaningless.