Does Greece have "odious" debt?

Alexis Tsipras wants Greece to stop paying odious debt. But does it have any?

"My five point plan": a phrase borrowed from Ed Miliband* may have helped boost the chances of Alexis Tsipras, leader of radical left-wing Greek party SYRIZA, which stormed into second place in the Greek parliament.

Admittedly, the Tsipras plan is rather more radical than Miliband's. It calls for:

  • Cancelling the technocratic former government's bailout terms, particularly its cuts to pensions and salaries.
  • Overturning their abolition of collective bargaining and other laws that attack workers' rights.
  • Changes to improve democracy and social justice, from removing MPs immunity to prosecution to overhauling Greece's proportional electoral law.
  • A public review of Greek banks.
  • A hold on all debt servicing, and an international committee examining the Greek deficit, particularly looking at whether any of the debt can be termed "odious".

The last point is the most interesting one. Odious debt is a legalistic term: It refers to debt run up by a former dictator, which a legitimate successor government can realistically argue ought not to be paid off. As a paper in the Duke Law Journal (via alphaville) puts it:

By enshrining a doctrine of odious debts as a recognized exception to the rule of state succession, some modern commentators have argued, a successor government would be able legally to repudiate the loans incurred by a malodorous prior regime. This, they contend, would have two benefits: it would avoid the morally repugnant consequence of forcing an innocent population to repay debts incurred in their name but not for their benefit, and it would simultaneously force prospective lenders to an odious regime to rethink the wisdom of advancing funds on so fragile a legal foundation.

The authors of the paper point out the problem with such a concept, though:

If this new version of the odious debt doctrine is to be workable, someone must assume the task of painting a scarlet letter "O" on a great many regimes around the world. Who will make this assessment of odiousness and on what criteria? The stakes are high. An unworkable or vague doctrine could significantly reduce cross-border capital flows to sovereign borrowers generally.

Their fears are proved right by Tsipras' argument. For all that the imposition by the EU of a technocratic PM on the Greek people was questionable democratically, the resulting government was hardly on par with the last one which brought odious debt into the public arena: Saddam Hussein's.

Even if Tsipras is making the weaker claim that debt left over from Greece's junta, which collapsed in 1974, ought to be cancelled (if there is even any outstanding), he would be on questionable grounds legally. The whole argument seems far more likely to be a way to announce a selective default without actually announcing a selective default. That or a cynical ploy to get elected.

We'll see the final outcome next Thursday, when the next round of legislative elections are rumoured to be pencilled in for.

*Probably not.

Alexis Tsipras, head of SYRIZA, at a press conference in Athens. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Cabinet audit: what does the appointment of Andrea Leadsom as Environment Secretary mean for policy?

The political and policy-based implications of the new Secretary of State for Environment, Food and Rural Affairs.

A little over a week into Andrea Leadsom’s new role as Secretary of State for Environment, Food and Rural Affairs (Defra), and senior industry figures are already questioning her credentials. A growing list of campaigners have called for her resignation, and even the Cabinet Office implied that her department's responsibilities will be downgraded.

So far, so bad.

The appointment would appear to be something of a consolation prize, coming just days after Leadsom pulled out of the Conservative leadership race and allowed Theresa May to enter No 10 unopposed.

Yet while Leadsom may have been able to twist the truth on her CV in the City, no amount of tampering will improve the agriculture-related side to her record: one barely exists. In fact, recent statements made on the subject have only added to her reputation for vacuous opinion: “It would make so much more sense if those with the big fields do the sheep, and those with the hill farms do the butterflies,” she told an audience assembled for a referendum debate. No matter the livelihoods of thousands of the UK’s hilltop sheep farmers, then? No need for butterflies outside of national parks?

Normally such a lack of experience is unsurprising. The department has gained a reputation as something of a ministerial backwater; a useful place to send problematic colleagues for some sobering time-out.

But these are not normal times.

As Brexit negotiations unfold, Defra will be central to establishing new, domestic policies for UK food and farming; sectors worth around £108bn to the economy and responsible for employing one in eight of the population.

In this context, Leadsom’s appointment seems, at best, a misguided attempt to make the architects of Brexit either live up to their promises or be seen to fail in the attempt.

At worst, May might actually think she is a good fit for the job. Leadsom’s one, water-tight credential – her commitment to opposing restraints on industry – certainly has its upsides for a Prime Minister in need of an alternative to the EU’s Common Agricultural Policy (CAP); a policy responsible for around 40 per cent the entire EU budget.

Why not leave such a daunting task in the hands of someone with an instinct for “abolishing” subsidies  thus freeing up money to spend elsewhere?

As with most things to do with the EU, CAP has some major cons and some equally compelling pros. Take the fact that 80 per cent of CAP aid is paid out to the richest 25 per cent of farmers (most of whom are either landed gentry or vast, industrialised, mega-farmers). But then offset this against the provision of vital lifelines for some of the UK’s most conscientious, local and insecure of food producers.

The NFU told the New Statesman that there are many issues in need of urgent attention; from an improved Basic Payment Scheme, to guarantees for agri-environment funding, and a commitment to the 25-year TB eradication strategy. But that they also hope, above all, “that Mrs Leadsom will champion British food and farming. Our industry has a great story to tell”.

The construction of a new domestic agricultural policy is a once-in-a-generation opportunity for Britain to truly decide where its priorities for food and environment lie, as well as to which kind of farmers (as well as which countries) it wants to delegate their delivery.

In the context of so much uncertainty and such great opportunity, Leadsom has a tough job ahead of her. And no amount of “speaking as a mother” will change that.

India Bourke is the New Statesman's editorial assistant.