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Debt overview

Debt is both a symptom of a skewed global financial system and a cause of imbalances and poverty. Debt has long been used within and between countries as a way to maintain power over individuals and governments. Eurodad considers debt to be a political and ethical issue, not merely one of financing, and we are keen to push for cancellation of debts while exposing the responsibilities of creditors and supporting lasting changes to the international financial architecture.

Many countries have been caught in a debt-poverty trap over the last three decades. While civil society campaigning has made an impact and ensured that some debts have been cancelled, the overall problem has barely been addressed by existing initiatives and mechanisms. Rich country governments and creditor institutions such as the Paris Club, World Bank and IMF still wield disproportionate power. A country facing debt difficulties today would run into the same problems it did three decades ago, namely that there is no internationally recognised procedure to work-out sovereign debt difficulties in a fair, predictable and transparent manner.

Eurodad’s work on debt is in the following areas:

• Promoting multilateral debt cancellation for all those countries of the South that need it. Eurodad monitors official initiatives, analyses key debates and informs and stimulates advocacy;
• Tracking and scrutinising bilateral debt, private debt and export credit agencies. Eurodad exposes dubious deals and calls for new, fair and transparent loan contraction and arbitration processes;
• Working to reveal that many debts are illegitimate and that co-responsibility should be assumed by creditors;
• Advocating a needs-based approach to debt sustainability to replace the orthodoxy based on repayability.