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Illegitimacy, Illegality,Odiousness and Unsustainability of the August 2015 MoU and Loan Agreement

Updated: Jul 13, 2019

In its June 2015 preliminary report, the Truth Committee of Public Debt (Debt Truth Committee) demonstrated that the largest part of Greece’s post-2009 debt was in fact private debt converted into sovereign debt. The same countries and institutions that converted private into public debt later entered into a series of loan agreements and Memoranda of Understanding (MoU) from 2010 onwards, the bulk of which was used to repay the aforementioned debt and the ensuing interest, while at the same time imposing upon the Greek population conditions of extreme austerity.

The Debt Truth Committee found that the debt is odious, illegal and illegitimate and wholly unsustainable. Such characterisations were consistent with pertinent definitions adopted by

specialized UN bodies. Moreover, in line with other international human rights bodies, the Debt Truth Committee held that the conditions imposed upon Greece violated not only its Constitution but also its international treaty and customary obligations.

In August 2015, the Tsipras (SYRIZA/ANEL) government agreed to a new Memorandum of Understanding and a Financial Assistance Facility Agreement [loan agreement]. The terms of the August 2015 Memorandum of Understanding [Third MoU) and loan agreement entered into by the Tsipras government brought into question two particular aspects of odious debt doctrine, namely:

a) the proper place of economic self-determination (as expressed by the popular vote) in debt restructuring, and

b) the actual outcomes of these agreements on the Greek people, the fiscal and financial impositions on the State and the sustainability of the debt overall. These aspects of the agreements determined the odious, illegal and illegitimate nature of the aforementioned outcomes.

Read the second Report of the Debt Truth Committee here.

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