The governments change, the debts change. The rhetoric, on the other hand…
In light of the Greek prime minister’s recent ‘humiliation’ speech and the rather heated reaction it’s had among official creditors (and private bondholders) – we thought we heard some historical echoes. So we took a quick look through the archives.
1) The anti-imperialist/romantic
But here we are, we suffer a circumstance, a reality, to which… we are going to give an adequate response, a realistic response… in which we pledge our moral, physical, historical presence… to what we owe to the western banks, and how we confront the IMF.So we will pay, but under what conditions we are going to do this, that depends on our anti-imperialist capacity not to be subjugated by the bad creditors…We want to clarify, properly and definitively, what that means… all servicing of external debt, including to financial institutions and countries, and commercial banks, will not take up more than 10 per cent of our total exports… paying 10 per cent means changing the terms, paying 10 per cent means varying the interest rates, paying 10 per cent means regaining independence and sovereignty. So far we have been ruled from without; now we begin to rule for ourselves.
– Alan Garcia, President of Peru, speech to the United Nations general assembly, September 1985
2) The legalistic/pedantic
I do not feel it is fair to define the so-called external debt of Argentina as indebtedness contracted by the Argentine state to external creditors, deserving of defining our position with the phrase: we should honour the assumed commitments. I feel that things are not so.We cannot forget that what some crudely call the so-called external debt, at least partially, is the greatest economic fraud ever seen in the history of Argentina (applause)…Let me be very clear; Argentina’s external debt has been paid without complying with the constitutional requirement that says it is given to Congress to regulate the payment of the nation’s external and internal debt (applause)…Let’s take the bull by the horns, let’s talk about the external debt. First I declare that the Argentine state will suspend paying the external debt (prolonged applause and shouts of Argentina, Argentina). This does not mean a repudiation of the external debt, it does not signify a fundamentalist attitude. Quite on the contrary, it is the first act of a government that has a rational stature in giving the issue of the external debt its proper treatment…Transparency is done, it is not proclaimed. Gentlemen, the books will be opened to you (applause).All monies that are provided in the budget for paying the external debt, while payments are suspended, will be used without hesitation and without exception, in plans of job creation and social progress (applause)…
– Adolfo Rodriguez Saa, President of Argentina, speech to the Argentine congress, December 2001
3) The paranoid/messianic
The institutions’ persistence that we follow a program of austerity that has obviously failed, and their insistence on measures that they know we won’t accept cannot simply be a mistake, or a result of overzealousness.Chances are, their insistence serves political motives, as well as a political plan to humiliate not only the Greek government but also, our country…If the objective is to continue with an IMF-inspired program–widely acknowledged as having failed–and without addressing the debt, then we are left with no choice.We are obliged to not capitulate…It should be noted that the IMF, as well, bears criminal responsibility for Greece’s current state of affairs.After all, it was the IMF that erred on the multipliers, in its calculations on the recession.And while the IMF has apologized, this has done little to help those who lost their jobs to live a life with dignity, nor did it feed the thousands of poor and socially excluded.It did not increase pensions nor did it reopen small businesses that had gone under.The apology was merely a cynical confession made by technocrats that had no consequences.The time has come for the IMF’s proposals to be judged. And to be judged publicly.Not by us, but by Europe itself.The time has come for Europe to seriously discuss Greece’s future—and the future of the Eurozone itself.Does it want, by insisting on its stance, to lead a country and its people to humiliation and impoverishment or does it want to reach an agreement and to further democracy and solidarity?..
– Alexis Tsipras, Prime Minister of Greece, speech to the Syriza parliamentary group, June 2015
The difference, of course, is that Greece hasn’t actually defaulted yet, unlike in the Peruvian and Argentine examples. In Peru’s case, that default included IMF loans.
On the other hand, if the Greek default announcement comes — the IMF and its fellow creditors will know what to look for.
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