The mandate of the Truth Committee on Public Debt is to examine the nature and extent of the country’s public debt, as well as the processes relating to the contracting and/or accumulation of the debt and the impact of the cuts or changes in the provision of public services, programmes and benefits by the Government on the human rights and well-being of all people living in Greece, in order to identify what share of the debt can be considered as illegitimate, illegal, odious or unsustainable and thus unpayable. In this context, it was important that the Committee should have a shared understanding of these terms. To this end, the Committee created a small working group to propose definitions of the terms which would inform its work.
The working group reviewed the various definitions of the terms as used by various scholars, debt relief campaigners and others and proposed some definitions which were subsequently discussed and adopted by the Committee. These definitions, which provided the framework for the assessment of the debt undertaken by the Committee over the last month or so, are the following:
Debt that the borrower cannot be required to repay because the loan, security or guarantee, or the terms and conditions attached to that loan, security or guarantee infringed the law (both national and international) or public policy, or because such terms or conditions were grossly unfair, unreasonable, unconscionable or otherwise objectionable, or because the conditions attached to the loan, security or guarantee included policy prescriptions that violate national laws or human rights standards, or because the loan, security or guarantee was not used for the benefit of the population or the debt was converted from private (commercial) to public debt under pressure to bailout creditors.
Debt in respect of which proper legal procedures (including those relating to authority to sign loans or approval of loans, securities or guarantees by the representative branch or branches of Government of the borrower State) were not followed, or which involved clear misconduct by the lender (including bribery, coercion and undue influence), as well as debt contracted in violation of domestic and international law or had conditions attached thereto that contravened the law or public policy..
Debt, which the lender knew or ought to have known, was incurred in violation of democratic principles (including consent, participation, transparency and accountability), and used against the best interests of the population of the borrower State, or is unconscionable and whose effect is to deny people their fundamental civil, political, economic, social and cultural rights.
Debt that cannot be serviced without seriously impairing the ability or capacity of the Government of the borrower State to fulfil its basic human rights obligations, such as those relating to healthcare, education, water and sanitation and adequate housing, or to invest in public infrastructure and programmes necessary for economic and social development, or without harmful consequences for the population of the borrower State (including a deterioration in the living standards). Such debt is payable but its payment ought to be suspended in order to allow the state to fulfil its human rights commitments.
First, there are historical precedents for invocation of one or more of these principles to relieve a country of the burden of repaying debts incurred in questionable circumstances. For example, after the Spanish-American War of 1898, the United States contended that neither Cuba nor the United States should be held responsible for the debt incurred by the Spanish colonial government in Cuba if it had been contracted without the consent of the Cuban people and had been not been used for their benefit. Although Spain never accepted this argument, it assumed responsibility for the Cuban debt under the Treaty of Paris signed between the United States and Spain on 10 December 1898. In the Tinoco Arbitration of 1923, the arbitrator (United States Supreme Court Chief Justice William Taft) ruled that credits knowingly extended to a country for a dictator who used the money for his personal purposes should not be recoverable. More recently, the odious debt doctrine has been invoked to support calls for debt cancellation in Rwanda, Iraq and Nigeria.