We, the undersigned, are sponsoring a citizens’ debt audit for Ireland. In the interest of transparency, we wish to know how the Irish debt — especially the bank debt for which the state has assumed responsibility — was incurred and to whom it is owed. We sponsor this audit as organizations that have a proven record on matters of debt and social and economic justice, and as representatives of the social justice and trade union sector in Ireland. The Irish people are paying a heavy price for servicing a debt that was, in large part, not of their making. They have a right to know the details of that debt and, supported in part by the findings of this audit, to determine its legitimacy (or lack thereof). The Irish debt audit will be carried out speedily and its findings made freely and widely available.
Background: Lessons from the Global South
Debt audits are being used across the world to help civil society to hold to account those responsible for the damage caused by their countries’ indebtedness. Debt audits can be a powerful tool to support civil society access information on the debts of their countries in order to judge for themselves whether the debts should be paid; and the implications of any payment or non-payment decisions. This is an approach which is gaining international currency at governmental and citizenry levels. For example, a governmental supported debt audit has been implemented in Ecuador, and parliamentary audit initiatives are being planned in Bolivia, Brazil and in the Philippines resulting from citizen pressure. Debt audits are viewed with growing interest across Africa too. International co-ordination in this area is rapidly increasing. For example, two former Ecuadorian ministers have recently signed a call to support a debt audit in Greece. Greek and social justice groups from around the world are also supporting this call for an independent Irish debt audit. As one of the organisers of the Greek debt audit call, economist Costas Lapavitsas, puts it:
Can we be certain that the bulk of Greek public debt is legal, given especially that it has been contracted in direct contravention of EU treaties which state that public debt must not exceed 60% of GDP? The creditors — mostly core European banks — were fully aware of flouting this legal requirement when they lent to the Greek state. Is Irish public debt legitimate, given than much of it is speculative bank lending with a public tag placed on it? Is debt in both countries ethically and morally sustainable if servicing it implies the destruction of normal social life?
An independent Irish debt audit will support people in Ireland to form an opinion on where responsibilities lie with regard to the Irish debt crisis. Its findings will also highlight lessons that will be shared with lenders, borrowers and citizens in other indebted countries around the world.
Structure and Process
The Irish debt audit will be carried out by 3 independent researchers commissioned by the sponsoring organizations and will seek to answer the following questions, amongst others:
- What is the overall scale of the Irish debt?
- To whom is the bank debt (for which the state has assumed responsibility) owed?
- When was this debt contracted? Specifically, was it before or after the government’s bank guarantee was issued?
- When does the debt fall due for repayment? And how much has already been repaid, and to whom?
- How much of the debt is senior, guaranteed and subordinated? And what are the legal implications arising from these different categories?
The researchers will not make recommendations regarding the legitimacy of the debt — they will simply establish the facts insofar as that is possible.
The researchers will be drawn from relevant disciplines, such as finance, economics and law. The criteria for identifying the researchers will be as follows. The researchers will:
- Be experienced, independent and credible scholars with a proven record in working in the area of public policy in Ireland;
- Not previously have expressed a public opinion on Ireland’s debt crisis, or be affiliated with a particular political party, thereby establishing their impartiality.
The research will be carried out expeditiously — it will begin in May 2011 and aim to have at least preliminary findings available by the end of June 2011.
Supporting the Work
The work of the audit researchers will be supported by a steering committee comprised of four agreed representatives of the undersigned organizations. This committee will advise and assist the researchers, and offer editing suggestions, but they will not in any way compromise the integrity or independence of the audit. Nor will any other sponsoring organization have any influence over the findings.
Funding of the Audit
The work will be funded by independent civil society organisations and by individual donations.
The audit findings will be disseminated widely among Irish civil society in order to support public responses to Ireland’s debt crisis. It will also be disseminated internationally. No sponsoring organization need take responsibility for, or endorse, the findings, though all may make use of the findings as they see fit for advocacy and campaigning purposes.
Regional Secretary General
Nessa Ní Chasaide
Debt and Development Coalition Ireland