That debt ascribed to us by the financial system and the political class
is not ours. It is illegitimate because nothing to the people’s benefit comes
from it, and to accept it is to legalize the robbery of our future.
Contents
0 – Introduction
1 – The parties’ free will
2 – A primordial political illegitimacy
3 – Illegitimacy as to the objective
3.1 – Occultation, the mother of all swindles
3.2 – Conditions for evaluating legitimacy
0 – Introduction
In the first part of this text we strived to
jot down some notes on how the financial system imprisons Humankind by using
direct and indirect debt, the latter arising through the State and the
political classes’ intermediation.
This process, of Dantean dimensions and painful effects to peoples’
lives, demands a matched solution – the suppression of capitalism, as plague,
slavery, or feudal bonds disappeared or became marginal – as decisions
pertaining to collective needs must emanate from, and be under the constant
scrutiny of, populations, with the abolition of the political aristocracies.
We are aware of the insufficiency or inexistence of anticapitalistic
popular movements. Furthermore, that absence has been preventing a serious and
broad discussion of the situation or the evaluation of the capitalist process’
internal limitations, which generate profound inequalities resulting in the segmentation
into areas of leading edge technologies and high productivity, and regions
based upon low qualifications, miserable wages, as miserable are the life and
work conditions.
In all complex political processes there are always those seeking the
sufficiency of the small steps logic – absorbable by the system – without
confronting face to face the problems’ seriousness and the radicalism of the
solutions which may, or may not, be feasible in the short term. It is part of the reforms’ logic, of the
convincing, naïve or opportunistic, that participating in government bodies or
using the laws of a nation-state can reverse the tendencies inherent in
capitalism’s pressure which, furthermore, is exerted with a global scope.
Hence, we will try to point out the limitations of the approach
described in the previous paragraph which, while it may cause some inconvenience
to the financial system’s institutions or to the political class, does not
particularly ruffle any global capital’s feathers, nor of the “representative”
political system’s architecture. Still, it may instill upon society the idea –
dangerous and false – that those approaches and practices may be able to shake
the capitalistic power of the political class in its entirety.
Starting from a more polarized approach, upstream of the capitalism’s
systemic analysis in its neoliberal and financial predominance phase, when a
state takes on a debt there is a chain of vectors to be considered in order not
to accept it.
1 – The parties’ free will
In the Portuguese case, as in the case of other European peripheral
countries, there have been, and still are, external and internal political
constraints such as: the national banks’ pressure to occurrence of public
intervention, to their recapitalization or transfer of bad assets to state
entities; governments’ connivance; the unequal severity (“France is France!”);
and the European Commission’s demands for continuing indebtedness in the name
of an homogeneity of policies which is ill adjusted to the huge inequalities
known to exist within the EU and, in particular, within the Euro Zone.
In what concerns
the creditor party, the banks, and the global institutions which convey the
financial system’s interests (IMF, European Commission, ECB or Eurogroup,) one
should not expect the claiming of external constraints in order to constitute
debt. On the contrary, that statement has every reason to come from the debtor
party, the people and their presumed representatives (governments, parliaments,
political classes).
Any external
imposition upon a people, by its very exceptionality, cannot ever be considered
as an act of current management by any government. It can be admitted that, under a given
political conjuncture, the majority of the political class, the government and
the parliament, reject those impositions before the financial capital’s
representatives; as it is admissible to suppose that, with greater probability,
the market democracy institution’s decisions, comprised, in general, of
conniving governments and parliaments, corruption practitioners, defenders of
capitalism and markets’ predominance, will be those of accepting that
imposition or of devaluing its effects on the masses.
Within the latter
context, there are reasons for a people to democratically express itself about
those impositions through a referendum (without any perverting tricks from the
political class) and decide, with sovereignty, to accept or not to pay the
effects of the financial markets’ dysfunctional mechanics.
2 – A primordial political illegitimacy
The legitimacy
question has both a political and an ethical character and is tied with the
existence of an extremely violent international and domestic legal order within
which the peoples well-being loses all dignity, crushed by the capitalistic
accumulation, and the financial system is predominant, in a guise which is
quite distinct from the one observed at the beginning of the XX century. That violence, resulting in a debt whose full
payment cannot ever be reached, does not contemplate, inherently, the payment
of a defined number of installments. On the one hand, the perpetuity of the
capitals drained from the peoples is like a forced rental which cannot be rescinded,
and for which rent payments are demanded. On the other hand, taking into
consideration that debt is imposed upon peoples by state violence, it would be
better to designate that operation as a capture or conquest and the rents as a
product of ransacking or spoliation.
The illegitimacy
inherent in theft situations is a result of this violence, and to claim or
admit, at a global level, a restructuring, amounts to ennobling the thieve and
its accomplices, and transforming the pillage into a contract between peers.
If a creditor,
despising the most elementary rigor in assessing the debtor’s economic and
financial situation, ceaselessly instills in it the assumption of a debt, that
creditor takes on a malicious role that, in a situation of debtor insolvency,
nullifies its reimbursement rights. The UN General Assembly’s resolution dated
from September 10, 2015, “urges debtors
and creditors to “act in good faith and cooperation spirit in order to achieve
consensus in the adjustments” to
sovereign debts”.
Based on the cited
UN General Assembly view, 19 economists, among which Picketty, Varoufakis, and
Galbraith, signed a resolution proposal aiming the debt’s restructure, envisaging
a conceptual view of that restructure that goes far beyond the narrow
understanding assumed by that Portuguese political class’ branch which is less
rightwing. So, that group of economists
formulated a set of nine principles – sovereignty, good-faith,
transparency, impartiality, equitable treatment, sovereign immunity,
legitimacy, sustainability and general restructuring.
As in other
situations pertaining to the Portuguese case – the adoption of the
Constitution, IMF interventions in the XX century, joining the EEC, joining the
euro, signing the Lisbon Treaty… governments assume that the populations do
grant them unrestricted mandates and should be kept away from governance that,
given its complexity, can only be tackled by the privileged brains endowing the
political class. This assumption draws an essential cleavage between the overwhelming
majority of the population and the partisan and entrepreneurial gangs that
lower wages and pensions and, on the other hand, burden them with austerity,
cuts, and an asphyxiating fiscal puncture having as background that everything
is justifiable by the payment of the public debt and, above all, its
obligations.
The current
political regime, of falsified representation, with irrevocable mandates, is
well synthetized in the Constitution’s 10th article which institutes
the political parties as the organizers and the expression of the popular will,
taking away from the population the direct manifestation of its will and
choices. The overwhelming majority of the population is given the abstract
power of the vote; but, if it is exercised, it is conditioned by choices
defined by the political directorates, since the right to stand for election
for political functions, directly and without the constraints of the cited article 10 is –
effectively – withdrawn from population. Wherever that happens there is no
democracy; and where there is no democracy there is no legitimacy of those
exerting political functions, coming from a minority chosen in the bosom of
closed, hierarchical, and mobster structures. Therefrom, in what concerns
debt’s obligations, amongst others, all contestation by the injured ones is
admissible, above all by those not participating in the electoral circles of
the market democracy.
In the case of
public debt establishment, in general, and is aggravating swelling, we are
before a continued, systematic policy, distributed across annual[1]
exercises, that obliges and burdens several future generations and that is
substantiated in a sheepish submission to the financial capital’s wishes. This submission configures a heavy and
unceasingly worsening yoke, even if the wishes of renegotiation and
restructuring manifested by the political system’s leftwing, and which are no more
than mediatized ways of showing service to their militants and sympathizers. Greeks, for the
worst reasons, announce in advance what the restructuring admissible by the financial
system and earmarked for isolated countries is, and how much it is worth,
without any supposition of a negotiation, given the bonds of obedience and
ideological straightjacket that the political classes live in.
Given this context,
it is fair that a people refuse the harmful compromises assumed by those parts
of the political class which take turns controlling the pot.
3 – Illegitimacy as to the objective
Several situations
can be considered here.
In a first
approach, recourse to indebtedness can have an unassailable righteousness
objective, such as a hospital, but the works’ financing contract can either be
drawn within the normal and legal parameters or the same can be marked by
constraints and unconscionable parameters indicating business corruption
between the financers and the highest State representatives.
Another situation
is when the objective has nothing to do with the satisfaction of collective
needs (for instance, the bulldozing of a poor neighborhood, the poor to be
relocated to the periphery, in order to enable building a luxury condominium or
a golf field) in which case the financing might or not be stricken by
fraudulent clauses that, when they exist, only highlight the assumed debt’s
illegitimacy.
In addition to
those situations including the assumption of a debt, there are others that,
without explicitly including it, configure unnecessary public spending, politically
condemnable and illegitimate. The debt was still to be the central element of
the capitalist domination over Portugal and already illegal objectives could be
discerned in the governmental (Sócrates) actions, with the right wing’s
conniving and the distraction of the (regrettable) parliamentary[2]
left wing. We refer to the Portuguese participation in the Afghanistan war which had a very
clear set of unconstitutionalities, publicized by us at the time (2010), with
the patent lack of interest of the pasty and tamed press. The same can be said
about the deflection by Cavaco, during its consulate, of Social Security
funds to the social action. Illegitimacy is present in governmental action
whenever there is no popular sovereignty, with the decisions known and
validated by the communities or susceptible of being nullified by the people;
illegitimacy is an immanent characteristic of the current market democracies.
3.1 – Occultation, the mother of all swindles
Let us return to
the debt. When an individual or a company applies for a credit, the financial
institution asks for information about the life, estate, income and (our
emphasis) the motives, the objectives justifying the loan application. As is
obvious, when the requestor is a large company, or a powerful enterprise group
with large sets of shares or deposits in a bank, the later goes easy on the
operation’s analysis, hence the huge volumes of bad credit (where the cream of the
Lusitanian entrepreneurship shines) that the EU decided to ascribe to the
national states; meaning, the multitude of those paying taxes, forced to
recapitalize the bankrupt banks (the famous bail-out).
As a rule, nothing
like this happens to public debt. States, through their governments, take on
debts before the financial system, both parties knowing that standing behind
the debts there is a whole population as guarantors. The risk is minimal for
the financial system, as can been seen in the case of European’s periphery
countries, since the respective political classes, the European institutions
and the IMF will know how to be imposing
enough to define coercive and looting measures of the populations, in order to
avoid any defaults. In other words, that
said population acts as the financial capital’s implicit warrantor and,
simultaneously, as the compulsive payer of the same capital; the political
class is a normal executive agent charging, naturally, their fees through
stewardships and corruption.
To the political
class, within which the taking of the loan is decided, the matter of asking the
payer of the loan and the loan’s interest – the population – if they agree to
resort to credit, how to apply it, and
with the loan’s terms and conditions (interest rates, payment periods,
instalments), is never raised. The
political class, through the State instrument, burdens the population with a
debt without a priori asking it
anything and without informing, even a
posteriori, what will be the use of the loaned money; it will know to
exempt itself of all responsibilities – personal or collective – and, in the
worst of cases within the market democracy’s context, a change of protagonists
will take place after a more or less heated discussion during an electoral
campaign.
Any government can
only be troubled enough to inform “the market” that it will be issuing for sale
some debt certificates, simultaneously asking for the market’s attention and
some nice interest rates. For instance,
for an €1000 M emission, each of the 10 M Portugal’s residents will assume, on
that same day, an average debt of €100 plus its interest, without knowing why,
to what end, and without losing her or his appetite for dinner when learning
about the titles emission good reception by the “market”.
In the last years,
the troika, supplied the Portuguese
State with €12000, with its application earmarked for rescuing banks with
difficulties[3], the
reason for a whole population to be involved in such intermediation being a weird one,
in a public and high risk compromise, totally alien to a juridical order that
sanctifies the private enterprise and entrepreneurship according to which all
responsibilities (correctly) will fall upon the partners or shareholders.
The poor’s bad
“entrepreneurship” is sanctioned with bankruptcy or ruin and the neoliberal
avatars will say that competitiveness was missing, that the management model had
not been well prepared, without it being know whether or not the prestigious
(??) IEFP[4]
will find any employability for the bankrupt ones. When the case is the rich’s
entrepreneurship’s failure, the State assumes the external debt in order to
recapitalize it and forwards its costs to the poor. This is how the neoliberal
business model works, dutifully fulfilled by the on duty branch of the
political class, with the supervision of draghies, dijsselbloems or
constâncios.
The Portuguese
State Budget proposal for 2017 (OE2017), in its article 102, institutes: “1- In
order to face the financing needs deriving from the execution of the State
Budget, including those services and funds possessing financial and
administrative autonomy, the Government is authorized to increase the direct
liquid global debt up to a maximum amount of € 9 350 000 000,00”. And further ahead, in its article 106,
informs that the Government may resort to the emission of floating debt up to a
maximum of €20000M; in the case of the latter debt it is known that it has a
short term application, for the purpose of stabilizing the treasury’s balances.
In the approved
OE2017, in the Table III.4.V.3.2., it is mentioned that the liquid financing
needs will be on the amount of € 9609 M, contrasting with the € 13140 M
estimated for 2016, a situation which, if it comes to pass, will be the lesser
of evils. By liquid needs it is
understood that, in the debt’s gyrating door, there will be more entries than
exits, more accruals than reductions, despite it being already known that the
building is bursting.
This forecast,
repeated year after year, always with little tranquilizing amounts, is made
without the concrete application of the financing outcome being known, as has
already been said. The governmental
gangs managing the State and the public indebtedness feel comfortable behind
their coercive power over the population, and exempt themselves from providing
explanations. The population, on the
other hand, ideologically dominated by the naturalness of its submission to the
state’s power and governments, accepts the future payment of an invoice where
the dispensed goods or services are not disclosed, only the amount. The crowd[5]
really is soft and pays, pays, pays…
To worsen the
situation, the State provided services do not, in general, expose any benefits
that can be linked with the recourse to the capitals “market”; to the contrary,
it is the systematic recourse to indebtedness and interest payment that
generates the flow of bankruptcies, unemployment, austerity, cuts, emigration,
and degradation of the essential public services.
3.2 – Conditions for evaluating legitimacy
In Spain, Zapatero and Rajoy, in 2011, decided to secure a change to the
Constitution’s article 135, which assigns priority to the payment of interest
and debt and, with whatever is left… it will be seen afterwards what the
quality and quantity of public services will be. The assigned hierarchy is clearly seen;
hundreds of thousands of people, ravaged by unemployment, were forcefully
evicted from their homes, with the police helping them to exit faster, in order
to not harm the financial system’s estate interests.
In Spain, in face of the popular movement of 2011/13, the political
class was forced to inscribe that priority in the law, however its equivalent
is in fact being applied in Portugal without the need for any constitutional
changes, given that the meekness, already quite present amongst the Portuguese,
was at the time enhanced by provocateurs who shined in the
stifling of the creation of autonomous social and political movements that
could question the wellbeing of the “left wing” mandarins.
For a significant part of the debt, the absence of a direct link between
it and the funds’ correct application makes it difficult to dispute its
legitimacy, based solely in the presentation of technical arguments. In other cases, however, there are debts
consigned to investments of dubious utility, such as the football stadiums in
the beginning of the century, or the scandalous commitments assumed in those
public-private partnerships cases which blatantly favor those economical groups
having a strong influence over the political parties with a governmental
“calling”, and quite probably involving criminal actions. In this context of a direct
connection, and given the secrecy that, traditionally, involves state
management, it is very doubtful that the governments will provide data towards
an assessment of presumed illegitimacies. Even admitting that those elements
are supplied, without being truncated, what guarantees are there that
governments will accept the popular verdict, their own condemnation, and move
to nullify the contracts and condemn those responsible for the fraud? The recourse to external audits, it is well known,
aims essentially to replicate the conveniences of those who pay them; and, if
judicial actions are involved, the judicial authorities’ usual slowness is also
known, especially in situations of white collar crimes. Finally, will the political class accept that
popular committees penetrate extensively and intensively within the State’s
heart, within the intimacy of the corruption’s production?
The State, as it appears to us, is a bunker; but it is a festivities
hall to capitalists and mandarins. The
admission of extensive audits to a country’s state apparatus is only possible
within the context of a wide contestation of a political regime; of the
political class’ critique and removal, of a profound change in the political
organization, with an assessment of the responsibilities in the establishment
of the debt as an element of integration into the financial capital’s plot, as
has been discussed in the present text’s first part and, that being
said, without forgetting the civil servants’ huge relevance in the execution of
such gigantic proportions task.
To admit extended, global audits without the above mentioned premises is
either to naively point to the impossible or a way to divert contestation
energies to side objectives. The same can
be said of those who talk about public debt restructuring in the ambit of
negotiations where equality between parties is illusorily assumed, one being an
isolated small or medium country, and the other the whole capitalist order,
orchestrated by the financial capital[6]. The solution will have to come from a
sufficiently vast set of determined countries, so that a significant part of
the debt is accepted as null and void and, therefore, erased from the balance
sheets of the financial system’s institutions, as part of the global finances’
deep healing.
If the states’ central apparatuses are particularly miser in what
concerns transparency, so are the autonomic institutions, either regional or
autarchic, even if in these cases, namely in the latter ones, the sums involved
are relatively modest. Let us look at the relative relevancies, to Spain and
Portugal, in millions of Euros and in GDP percentages.
State
|
Autonomic/ Regional
|
Municipal
|
Total
|
|
Spain
(March 2016) |
810.1
(74.4%) |
264.2
(24.3%) |
35.1
(3.2%) |
1109.4
(100.5%) |
Portugal
(October 2016) |
238.7
(132.9%) |
6.1 (2015)
(3.4%) |
4.5 (2015)
(2.5%) |
249.3
(137.8%) |
In Portugal, even in those so called left wing autarchies, opacity
dominates as well, benefiting from the inexistence of local groups that demand
information and mobilize the population against suspicious or pharaonic
expenses; occultation is the golden rule for partisan oligarchies, be them
national, regional, or autarchic. The
municipal assemblies themselves, even when they are not restricted to the
elected ones, see little participation by the population, wise of the chasm
between ordinary people and the mandarins, although things are a little
different on those where the population has diminutive volume and frequent
relations, be them family , personal, or neighborhood, exist.
In the Spanish state’s case, blocking PACD (Platform for a Civilian
Audit of the Debt – Plataforma para uma Auditoria Cidadã à Dívida) access to
elements of the state and autonomic debts continues. However, as a consequence of the latest
elections, several alcaldes and alcaldesas (mayors) took office, and
that fact opened doors, accounts, and autarchies’ archives, and there are
several ongoing, or already completed, assessments of unconscionable contracts
and illegitimate situations. That group,
of about 600 autarchy officials, has undersigned the Oviedo Manifest in order to create an
united combat force against the already mentioned article 135 of the
Constitution, the financial asphyxiation directed against autarchies and
autonomous communities (the Montoro Law,) the devolution of the abusive
interests collected by banks, and the cancellation of illegitimate debt.
Despite its limited number, in the context of the Spanish state’s total local
and autonomic administrations, the Oviedo Manifest initiative can become a
publicized example, since many of the signers were elected in the major
cities. In the Portuguese case, the
absence of autarchy officials defending a similar position is notorious and,
even rarer, the assumption in practice by any autarchy of an irregularities’ or
illegalities assessment. Even in those where
the Lusitanian kleptocratic regime’s left wing dominates. It would be an amazing thing, the oligarchs
revealing the results of their corrupt actions or careless management.
In Catalonia, the CUP – Popular Union Candidacy (Candidatura de Unidad
Popular), that has 10 parliamentary seats and has become a key element in the Generalitat’s management, has a radical
debt repudiation stance; <<We will
not pay your debt>>. In its
program, it proposes suspending <<immediately
the debt payments and that the definitive non payment of the legalized usury be
decreed in order to face the needs of the popular classes>>. The CUP is not opposed to the execution of
popular audits and decrees to be null and without effect any illegitimate debt
payment on behalf of international investment funds and banks. As can be easily seen, this debt’s yoke-liberating
reality view sits in the antipode of the Portuguese parliamentary left which is
satisfied with renegotiations, with meetings with the financial system’s representatives,
and the rest will remain to be seen.
However, it is completely plausible that any effect resulting thereof
will always be very limited, and that only an European-level examination of the
debt problem, including a significant cancellation at the financial system’s
expenses, can have real meaning to the lives of Southern Europe periphery’s
peoples.
(to be continued)
This one and other papers at:
[1] IGCP – Portuguese Republic Financing Program – liquid financial
requirements (founded debt, in euros): 2011 – 20000 M, 2012 – 17400 M, 2013 –
11500 M, 2014 – 11800 M, 2015 – 11000 M, 2016 – 7000 M. In turn, the State
Budget for 2017, Table III.4.V.3.2 (OE 2017, Quadro III.4.V.3.2.) lists the
requirements for 2015 – 11845 M, 2016 – 13140 M and 2017 – 9609 M.
[2] Translator note. In the original: par(a)lamentar.
Word play between parlamentar
(parliamentary) and para lamentar (regretable).
[3] According to the Public Accounts Tribunal, for the
period of 2008/15, the capital expenses in support of the financial system
reached €20083.4 M in 2012, the recorded estate at the end of the period being
€15458.6. CGD’s recapitalization is waiting around the corner.
[4] IEFP – Acronym of the Professional Training and
Employment Institute (Instituto do Emprego e Formação Profissional) (Translator
note).
[5] Translator’s note. In the original: mole. Word play,
as “mole”, in Portuguese, can mean both a crowd and soft.
[6] Apropos the swaps
agreed between Portuguese public companies and the Santander Bank, two
juridical instances in London asserted the bank’s reasons, and the Portuguese
State may have to come to pay € 1800 M. Naturally, the Santander bank must have
used a very well laid out procedure, designed by highly reputed specialists,
that functioned as a trap to the other party, which does not have a matching
technical capability but has, in contrast, a lot of levity.
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