Demystifying Alexander Nahum Sack and the doctrine of odious debt

Eric Tousaint’s study of the odious debt doctrine

by Eric Toussaint

Part 12 - Why the US repudiation of the debt claimed from Cuba in 1898 is relevant to Greece today

I can’t resist drawing a parallel with the current situation in Europe. The comparison with the Washington-Madrid-Havana conflict in 1898 is of capital importance if we study the situation of Greece and other countries such as Cyprus or Portugal in the 2010s.

After 2010, many recent studies demonstrate that the amounts Greece is being held responsible for were never transferred to the Greek authorities. They served mainly to repay private foreign banks, in particular French and German ones.

Since 2010, credits have been granted to Greece by 14 States of the Eurozone, by the IMF and by the European Stability Mechanism (ESM), which took over from the European Financial Stability Facility (EFSF), because Greece no longer has access to the financial markets (in another context, like Cuba under Spanish domination).

Thus the loans are in fact borrowed by third parties and then imposed on Greece under extremely harsh conditions. Less than 10% of the debt amounts imposed on Greece since 2010 have actually transited via Greece’s budget, and those sums have been used to finance counter-reforms and privatisations.

The borrowers mentioned above get financing from private European banks and then use their credit to repay them without the borrowed amounts ever actually going to the Greek treasury. It can be demonstrated that these loans have been of no benefit to the Greek people. They have not improved the country’s economic and financial situation. Quite to the contrary.

It should be added that, initially, the 14 countries of the Eurozone who granted credits to Greece made profits at the country’s expense by practising abusive interest rates (between 4 and 5.5%) between 2010 and 2012. The IMF also profited at Greece’s expense, as did the ECB.

That Greece is a borrower nation has been a fiction since 2010. That fiction serves the interests of the principal powers of the Eurozone, beginning with Germany and France. These major powers themselves defend the interests their major corporations, be they banking, industrial (and in particular arms makers) or commercial firms. The major powers have convinced 12 other Eurozone member countries and the IMF to maintain the fiction, with the complicity of the Greek authorities. The European Stability Mechanism (ESM) and the ECB participate in furthering the narrative. Big capital in Greece (banking, commercial – e.g. shipping – etc.) itself profits from the situation.

Source and references:

http://www.cadtm.org/Demystifying-Alexander-Nahum-Sack

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