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.

Photo: Getty
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What Jeremy Corbyn gets right about the single market

Technically, you can be outside the EU but inside the single market. Philosophically, you're still in the EU. 

I’ve been trying to work out what bothers me about the response to Jeremy Corbyn’s interview on the Andrew Marr programme.

What bothers me about Corbyn’s interview is obvious: the use of the phrase “wholesale importation” to describe people coming from Eastern Europe to the United Kingdom makes them sound like boxes of sugar rather than people. Adding to that, by suggesting that this “importation” had “destroy[ed] conditions”, rather than laying the blame on Britain’s under-enforced and under-regulated labour market, his words were more appropriate to a politician who believes that immigrants are objects to be scapegoated, not people to be served. (Though perhaps that is appropriate for the leader of the Labour Party if recent history is any guide.)

But I’m bothered, too, by the reaction to another part of his interview, in which the Labour leader said that Britain must leave the single market as it leaves the European Union. The response to this, which is technically correct, has been to attack Corbyn as Liechtenstein, Switzerland, Norway and Iceland are members of the single market but not the European Union.

In my view, leaving the single market will make Britain poorer in the short and long term, will immediately render much of Labour’s 2017 manifesto moot and will, in the long run, be a far bigger victory for right-wing politics than any mere election. Corbyn’s view, that the benefits of freeing a British government from the rules of the single market will outweigh the costs, doesn’t seem very likely to me. So why do I feel so uneasy about the claim that you can be a member of the single market and not the European Union?

I think it’s because the difficult truth is that these countries are, de facto, in the European Union in any meaningful sense. By any estimation, the three pillars of Britain’s “Out” vote were, firstly, control over Britain’s borders, aka the end of the free movement of people, secondly, more money for the public realm aka £350m a week for the NHS, and thirdly control over Britain’s own laws. It’s hard to see how, if the United Kingdom continues to be subject to the free movement of people, continues to pay large sums towards the European Union, and continues to have its laws set elsewhere, we have “honoured the referendum result”.

None of which changes my view that leaving the single market would be a catastrophe for the United Kingdom. But retaining Britain’s single market membership starts with making the argument for single market membership, not hiding behind rhetorical tricks about whether or not single market membership was on the ballot last June, when it quite clearly was. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.