G20 failure to tackle debt ‘incredible’

By agency reporter
4 Nov 2011

Commenting on the failure of the G20 to do anything to bring in a global system to deal with debt crises, Tim Jones, Policy Officer at Jubilee Debt Campaign said: “It is incredible that the in the midst of another global debt crisis, the most powerful countries are still failing to regulate irresponsible lenders."

Jones continued: "An orderly system is needed to cancel unjust debts, neutral of both creditors and debtors. Yet the G20 seem happy to continue with the debt debacle currently being played out in Europe, as has been seen across the world for the last thirty years."

He added: “The continuing history of debt crises - from Africa, Latin America, East Asia and now Europe – is that loans to bailout private creditors and enforced austerity do not work. Instead, reckless lenders need to be made responsible for their actions and debts cancelled. Global rules are needed to enable this to happen.”

Commenting on the ongoing European debt crisis, the Jubilee Debt Campaign officer continued: “There is still far too much obsession with bailing out banks, rather than cancelling debt. The people of Greece, Ireland and Portugal continue to have austerity forced on them whilst reckless private lenders get bailed out. European leaders have belatedly recognised the need for reckless private lenders to make serious reductions in their claimed debt from Greece. But without global regulations on private lenders, they are left making voluntary pleas for creditors to reduce debts.

“Many creditors, such as unscrupulous vulture funds, plan to ignore any voluntary write-downs and claim inflated debts for years to come. Meanwhile, the bank bailout and austerity plan which has failed so spectacularly in Greece continues on hyperdrive across the continent. When a country has too much foreign debt, austerity cannot reduce it."

Reagrding the pledge of extra resources for the International Monetary Fund, Tim Jones declared: “Giving the IMF more money to lend just continues the debt and austerity cycle. When you are in a hole you should stop digging. The G20 should have been working out how to reduce unjust debt burdens, not create more.”

Ekklesia is an affiliate of the Jubilee Debt Campaign

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