Desperately Seeking… the Truth about that Debt

bare treeThe Greek government via presidential authority has established a Special Committee of the Greek Parliament to investigate the truth about the creation and the increase of the public debt and the Auditing of the Debt (“The Committee on Public Debt”). It is high time the Greek people and the whole world come to know the truth behind how these high levels of debt were incurred, who was responsible and the nature of these debts.

This decision to establish ‘The Committee on Public Debt’ was taken pursuant to Greek laws and regulations and 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.


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.

In order to define the odious, illegitimate, illegal and unsustainable parts of the Greek public debt, the Truth Committee on the Greek Public Debt set up by the President of the Hellenic Parliament will use the definitions that follow. These definitions, based on the doctrine, the jurisprudence, the international treaties, and the general principals of international law, have been adopted with the consensus of the members of the Committee during its second plenary session, which was held from the 4th to the 7th of May 2015 in Athens. As mentioned by the principles of its mission, the Commission will formulate its recommendations with regards to the cancellation of the Greek debt, categorizing it on the basis of these four definitions.

In its report, the Committee will apply the following meanings to key terms described below.

“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 but its payment ought to be suspended in order to allow the state to fulfil its human rights commitments.

These three key terms are critical to understanding the nature of the current debt and who is responsible for what part of the Greek public debt.

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