Eric
Tousaint’s study of the odious debt doctrine
by
Eric Toussaint
Part
2 - Whether a regime was despotic or democratic was of little concern
to Sack
As far as
the jurist was concerned, when there is a change of regime caused by
annexation, division or revolution, the new regime must honour debts
accumulated by the previous regime. There would, then, be continuity
on State obligations towards creditors even after a radical regime
change. This was the conservative and reactionary position that held
sway over international relations at the time.
Moreover,
the democratic or despotic nature of the former regime or the new one
did not influence this general rule. In Sack’s view, what counted
was the existence of a regular government exercising power within the
State’s territory:
“By a
regular government is to be understood the supreme power that
effectively exists within the limits of a given territory. Whether
that government be monarchical (absolute or limited) or republican;
whether it functions by “the grace of God” or “the will of the
people”; whether it express “the will of the people” or not, of
all the people or only of some; whether it be legally established or
not, etc., none of that is relevant to the problem we are concerned
with.” (p. 6). (trans. CADTM)
According to
Sack, the new regime may question the validity of the debts it
inherits, should those debts prove to be odious. In such a case, the
new regime must obtain an international authorization to waive the
rule of continuity of obligations regarding debt repayment.
The
conditions he proposed are to be found at the end of this study. In a
nutshell, we shall see that Sack makes a distinction between the
nature of the debt bond and the nature of the government: an odious
government may underwrite non-odious loan bonds, and a government not
characterized as odious, that is nevertheless legitimate and
democratic, may underwrite odious debts.
Source
and references:
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