Behind the bankers' mask
In the context of another financial crisis, debt audits could offer a way to counter the power of big finance.
THE first wave of the
banking crisis is over. Banks successfully passed their losses onto
the public and their profits are once again 'healthy'. They are now
looking to governments to repeat the same trick for them.
Across Europe, and
Answering tyranny with knowledge
One idea that has
fuelled the imagination of activists in
Sofia Sakorafa is a dissident Greek MP, a former member of the Greek government who quit her party after refusing to sign up to the first 'bailout' package in 2010. She believes 'the answer to tyranny, oppression, violence and abuse is knowledge' - that public understanding of how the crisis came about, what Greeks are paying and to whom, will help to convince people of the moral bankruptcy of the current financial system and re-ignite a sense of ownership over their economy.
Sakorafa is clear that this is a battle for different values: 'Beyond speculating market games, there are more valuable concepts. There are people, there is history, there is culture, there is decency.' The crisis will not be solved by the odd piece of legislation but by a transformation of how individuals and communities relate to power.
The history of the debt audit
The idea of debt audits
arose from Southern campaigners with decades of experience in fighting
against the capture of their societies by Northern financial interests.
After all, the problems of
As that system of
control broke down in the 1970s, the world economy has experienced crisis
upon crisis, from the Latin American debt crisis of the 1980s to the
currency collapse in
On one level the argument for a debt audit is simply a call for transparency. If these debts are 'ours' then the least we can expect is to know what we are paying. But their impact goes much deeper. In the words of Irish activist Andy Storey, an audit can 'remove the mask of financial power which pulls the strings over our economy and therefore our society'. It is particularly important in a country that has been through dictatorial rule, in unveiling how international lenders propped up the illegitimate regime. But even in European societies, it digs deep into the connections between power and finance, unveiling how and in whose interests an economy works.
Most debt audits have
been done on a shoestring budget, using what information can be gleaned
from freedom of information and other research. The Brazilian Citizen
Debt Audit was the first such initiative in 2001. In 2006, President
Rafael Correa made
In 2008, the audit
commission reported that debt had done 'incalculable damage' to
wanted him to go much further in repudiating debts. This is one of the
problems of state sponsorship of such mobilisation processes, which
has also led to disappointment among activists in
in Zimbabwe are working on an audit to show the role that lending from
the IMF and World Bank, as well as Northern governments, played in the
creation of crisis in that country. Once
Some look on debt
audits as 'reformist' - surely the truly radical answer is for a country
to simply stop paying its debts? Actually it's not so simple. A default
is not automatically progressive - look at those of Mugabe in
People can't be led to support a default in the mistaken belief that 'everything will return to normal'. Things may get worse. As 28-year-old Icelander Thorgerdun Asgeirsdttir said after he voted to turn down the British and Dutch terms for repaying his country's debt, 'I know this will probably hurt us internationally, but it is worth taking a stance.'
Such an understanding
is also necessary if a default is to become a genuine first step towards
Clearly debt in
What does the Greek
audit hope to uncover? Greek academic and activist Costas Lapavitsas
has said he is not certain that the bulk of Greek public debt is legal,
'given especially that it has been contracted in direct contravention
of EU treaties which state that public debt must not exceed 60% of GDP'
- something the creditors were fully aware of. Some Greek debt was massaged
by Goldman Sachs to hide the true extent of
Nick Dearden is
the director of Jubilee Debt Campaign in the
*Third World Resurgence No. 253, September 2011, pp 19-20