LATEST TWEET:
RT @tim_jones6: Even with lowered growth forecasts from the @OBR_UK, remaining UK growth is still dependent on household debt increasing, f…
The Chancellor is not giving the full picture on UK debt. It should not be used to justify austerity measures:… https://t.co/MlTt90SDuz
RT @sarahjclifton: The idea that UK public debt levels justify austerity is ideological and wrong. Of the G7 economies, only Germany has lo…
RT @ZIMCODD1: @dropthedebt An Official debt audit is what we need
As impeachment proceedings begin in Zimbabwe against Mugabe, here is a reminder of how UK, IMF and World Bank odiou… https://t.co/POryNlzkRe
Join the movement

Osborne must stop the Greek vultures

Campaigners tell Chancellor to legislate against vulture funds taking action against Greece in British courts.

Global justice campaign group Jubilee Debt Campaign (1) has warned the British Government that London courts could be used by vulture funds trying to sue Greece in the wake of agreement on last night’s debt haircut. They called on the Chancellor of the Exchequer, George Osborne, to introduce legislation making such practices illegal.

Although the Greek debt reduction scheme – the Private Sector Initiative or PSI – received a high enough level of participation to proceed, 31% of foreign issued private holders (2) still held out against the deal. American law firm Bingham McCutchen, which has an office in London, has been trying to organise a group of funds which refused to participate in the Greek offer in order to take further means of getting paid the full value of their bonds. Some bonds have been written with recourse to English law, meaning it would be London courts which hear their cases.

Many of these funds are believed to have bought Greek bonds for a fraction of their actual value, because of the Greek crisis, with the aim of holding out for full repayment. Such funds are known as vulture funds. If such lawsuits are effective, they will not only take money from highly indebted Greece, but will eat into funds contributed to so-called ‘bail-out’ packages by countries like the UK. Last year the UK passed a law preventing vulture funds from profiteering from the debts of highly impoverished countries in British courts. (3)

Nick Dearden of Jubilee Debt Campaign said:

“Greece’s European neighbours have done enough damage to the Greek economy through a series of bank bail-outs. Now our courts could be used to squeeze the last drop of blood out of the Greek people.

“The ironic thing is – as in other cases – the vulture funds will also eat into the so-called ‘bail-out’ funds, meaning less money for debt repayments to British banks. And as we’ve seen in cases involving African countries, these funds are assisted by unscrupulous corporate law firms.

“Whichever way you look at it, we cannot allow our legal system to be used by funds which profiteer off misery. That’s why we’re calling on the Chancellor to clamp down on this type of activity.”

— ENDS

For more information contact JDC on 0207 324 4724 or 07932 335 464.

  1. Jubilee Debt Campaign UK is part of a global movement demanding freedom from the slavery of unjust debts and a new financial system that puts people first. For more information seehttp://www.jubileedebtcampaign.org.uk/
  2. Creditors who hold €152bn of Greek-issued bonds have agreed to take part in the deal, effectively accepting a 75% haircut on the value of their loans. That’s 85.5% of the €177bn of Greek-issued bonds that exist. Greece has decided that it will now force the remaining creditors to take part by enforcing ‘collective action’ clauses recently added to the bonds. However, there is another category of bonds – ones issued in foreign markets. Of these, creditors who hold a further €20bn have agreed to take part. That’s 69% of the total on the market. The remaining 31% of bondholders have until 23 March to decide whether to accept the terms. So by adding the €177bn to the €20bn, Greece has declared that €197 billion, or 95.7% of its debt pile, will be restructured.
  3. The Debt Relief (Developing Countries) Act limits the amount a vulture fund can claim from the 40 poorest and most indebted countries in UK courts. The forty countries are known as the Heavily Indebted Poor Countries and include countries such as Liberia, Zambia, Tanzania and Nicaragua. The international community has agreed to cancel significant amounts of these countries debts, currently totalling $120 billion for 32 countries. Such a bill could not be applied in its current form to other countries, but a law limiting the amount of profit which could be made on debts sold on secondary markets is possible – and has already been introduced once into the US Congress.

Countries

Greece
Jubilee Debt Campaign is a company limited by guarantee, number 3201959
Jubilee Debt Campaign's registered charity number is 1055675