Blog / 8 May 2011

The big default

The big default

How reasonable is it for example when the inhabitants of a country have to pay for loans which keep private banks from collapsing? How reasonable is it if the same inhabitants have to pay for loans which were given to their country, by banks who knew long time that the country could never pay the loan back? And lastly how reasonable is it if the same inhabitants have to pay back a loan which an overthrown dictator used in the past the enrich himself and buy weapons to strengthen his rule?

The last thing happened in the Philippines in the 70s, when the dictator Marcos was in power. Lidy Nacpil from the Philippine Debt Campaign says that Filipinos are still heavily effected by the loans that were that were given to Marcos. It doesn't seem very fair for a country like the Philippines to have to start a democracy with a debt of billions and billions of dollars that the people had nothing to do with. Of course the Philippines isn't the only southern country that carries an unjust burden. Countries in the Maghreb like Tunisia and Egypt, which are in the midst of a political and social revolution, face the same problems.

In Greece the feelings of unjust debt - created by a financial and political elite, according to most Greeks attending the conference - are very alive as well. Of course the oldest democracy in the world didn't just expel a one person government. That doesn't mean though that in finding solutions Greece can not look at countries from the southern hemisphere, that have gone through similar crises. An often mentioned solution during today's conference is that Greece should go for a default, like Argentina did a couple of years ago. It should just stop paying the interests and stop paying back its debts and deleting them altogether.

Like Thomas Sankara, the president of Burkina Faso, once said: "The debt cannot be repaid. If we do not pay, our creditors will not die, we can be sure of that. On the other hand, if we pay, it is we who will die, of that we can be equally sure".

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