Odious Debt Politics

UN imageHuman Rights in Ireland welcomes this guest post from Dr John Reynolds. John is a lecturer in law in NUI Maynooth.

In September 2014, the UN General Assembly adopted a resolution on the ‘establishment of a multilateral legal framework for sovereign debt restructuring processes’. This is a global South initiative emanating from experiences of predatory exploitation by the vulture funds of the North, but aimed more broadly at preventing debt crises and financial speculation from undermining socio-economic rights in all indebted nations. As we know, neoliberalism’s unregulated debt system has become increasingly universal in its reach. The resolution was adopted by a decisive majority of the UN’s member states, by a vote of 124 to 11. It builds on work done by UN authorities on conceptions of debt restructuring and illegitimate debt as they relate to the vindication or violation of socio-economic rights. Despite our own harrowing and ongoing debt crisis, Ireland aligned itself with the finance capital centres of the US, Britain, Germany and Japan in voting against the initiative, on the basis that ‘market-oriented approaches’ are preferable. I noted at the time that this was telling of where the current government’s loyalties and solidarities lie, and of its respective attitudes to global financial creditors on one hand, and socio-economic protections on the other.

On foot of the resolution, the General Assembly Ad Hoc Committee on Sovereign Debt Restructuring Processes was created, and held its first working session over the course of last week. The Irish government, as Debt & Development Coalition Ireland put it, has now ‘gone further again, by failing to attend the first meeting of the Committee on Sovereign Debt Restructuring. … It is rather bewildering that Ireland has boycotted the UN meeting, given Ireland’s traditional support for the UN, and Ireland’s own need for a [debt] solution’.

Should we be surprised, given the form of debt politics that this government has been engaged in? The Minister for Finance has been at pains to emphasise that Ireland’s own national debt—still among the highest in the world relative to GDP and including ‘the highest level of illegitimate private banking debt’ in Europe—‘is in a very good position’. And while having initially appeared receptive to SYRIZA’s proposals for a European debt conference, Fine Gael ministers have since sought to distance themselves from any form of heterodox thinking on the European periphery’s debt issues. When Yanis Varoufakis made clear that SYRIZA views the situation as a matter for Europe to deal with collectively in the interest of its peoples, and expressed his hope to work with Irish, Spanish and Italian representatives to that end, the response of the Irish Minister for Foreign Affairs was that any conference aimed at restructuring debt held by peripheral EU states is not in Europe’s interests. Establishment commentators supplement this with arguments that ‘Greece’s fight in Europe is not Ireland’s battle’; it is ‘the last thing we need’ to get mixed up in since ‘we have taken the pain of austerity and are now reaping some of the benefits … we are now seeing significant gains and getting the upside of sticking with it’.

The “we” seeing gains here and refusing to empathise with the plight of ordinary Greeks is of course very far removed from those families and communities of the 28.6% of children who currently live in deprivation in Ireland, and from those who turned up in numbers to welcome the SYRIZA delegation to Dublin over the weekend. When Irish leaders go to Brussels to pronounce that Ireland is ‘in a very different space than Greece’ and to pontificate about the lessons that other countries should take from Ireland’s austerity regime, however, it seems clear which “we” they speak for. And it is such pronouncements that prompt descriptions of Ireland as ‘a debtor nation, with a creditor leadership.’

 

As such, the imperatives of transnational capital are prioritised over the maximisation of resources for the realisation of socio-economic rights at home, and there is a distinct lack of solidarity with fellow members of the indebted European periphery. To expect any meaningful solidarity with the global South in the realm of debt restructuring, therefore, would appear to be wishful thinking. Just last month, the Irish government published its first major statement of foreign policy for almost 20 years, in a review entitled The Global Island. The document speaks of the importance of reducing the causes as well as the symptoms of global poverty, yet Ireland’s commitment to ‘A Fairer World’ is framed entirely through charitable conceptions of development aid. There is no acknowledgment of the structural inequalities perpetuated by the international economic order, nor any real attempt to understand Third World struggles in terms of global social justice. Five pages of humanitarianism-as-fairness is promptly followed by twenty pages on boosting ‘Our Prosperity’: by ‘removing barriers to trade and investment’, ‘ensuring a sustainable and competitive tax regime’, ‘deepening engagement with priority and high potential markets’, and so on. In an era of global debt crisis, it is somewhat telling that the word ‘debt’ does not appear once in the eighty-four page document. And while the importance of engagement with international organisations is repeatedly emphasised as a pillar of Irish foreign policy, the evidence from the UN last week again suggests that the government is not willing to entertain this in situations where those organisations venture to raise questions of restructuring unsustainable, illegitimate or odious debt.

Odious Debt Politics

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