Argentina passes law to establish debt audit commission

 by Jubilee Debt Campaign

The move comes as the South American country continues to resist the activities of vulture funds NML Capital and Aurelius Capital Management who are seeking a gigantic profit out of Argentina. The two vulture funds have refused to accept a debt restructuring agreed by 93% of other creditors, and have had their claim backed by a US court, preventing Argentina from paying their debts to everyone else.

In 2008, Ecuador established a public debt audit commission, which found that many bond contracts had been illegal under Ecuadorian law. The audit led to a large scale reduction in Ecuador’s debt after President Rafael Correa announced that he regarded much of the debt to be ‘illegitimate’. The government of Norway has conducted an audit into debts owed to it, and cancelled debts arising from loans for exports which were known to be damaging at the time they were given.

Sarah-Jayne Clifton, Director of the Jubilee Debt Campaign said:

“Debt audits can expose the illegitimacy of past loans, building the case for why they should not be paid, and giving greater accountability over future lending and borrowing. If carried out in a public way, a debt audit commission could give the Argentine people greater say over economic decisions, and set a global example for increased economic democracy.”

Dr Alan Cibils, chair of the political economy department at the Universidad Nacional de General Sarmiento in Buenos Aires, said:

“The Argentine law is a necessary first step to finally have a clear picture of the many fraudulent dealings behind Argentina’s cycles of unsustainable debt accumulation. Information will show complicity between corrupt military and civilian authorities and Northern financial institutions and governments. However, it is essential that the Argentine Congress take concrete steps to actually define the commission, and that the findings of the commission result in concrete actions. In this way, debt justice may finally result for Argentine working people who have been unjustly carrying the burden of debt speculation for decades.”

Oriana Suárez from the Latin American Network on Debt, Development and Rights (LatinDadd), said:

“We are very excited about the parliamentarian commission to audit Argentina’s external debt since the 1970s. It is a great step for the Latin American debt movements to have another country willing to audit the debt, not only because of the audit itself, which is a healthy mechanism to monitor the financial loans, but also because it will give the world new examples and evidence that in many cases the debt of the developing countries has been paid a long time ago. We encourage the Argentinian government to start the audit as quickly as possible. We also suggest that they invite international consultants to share their experience from the Ecuadorian Debt Audit and the Brazilian and Peruvian parliamentarian audits. We are looking forward for the results of this commission.”

The Jubilee Debt Campaign will share the findings of its own investigations into past UK lending to Argentina with the commission. Recent research has exposed that 38 per cent of Argentina’s debt to the UK comes from loans to the dictatorship of the 1970s to buy military equipment, primarily for two warships and associated helicopters and missiles which were later used to invade the Falkland Islands. The Liberal Democrat party, junior partner in the UK’s Coalition government, has a policy to “conduct our own audit of all existing UK government and commercial debts, ruling invalid any past lending that was recklessly given to dictators known not to be committed to spend the loans on development”. Business Minister Vince Cable has refused to do so since he has been in charge of the department responsible, UK Export Finance.

Source : Jubilee Debt Campaign