Greek government says debt owed to international banks is 'illegal, illegitimate and odious,' and should not be repaid

(NaturalNews) The current leaders of Greece were not in power when the financially strapped nation was begging the International Monetary Fund and the European Central Bank for bailout funds a few years ago. However, for current leaders to now declare that such loans were somehow illegal and unjust is particularly galling to some, especially those currently attempting to get Athens to pay back what it owes.

And yet, that is precisely what a committee of the Syriza Party-led Greek parliament just concluded.

In April, as noted by Zero Hedge, Zoi Konstantopoulou, speaker of the Greek Parliament and member of Syriza, a socialist party, claimed she had assembled a new "Truth Committee on Public Debt," whose purpose was to "investigate how much" of the country's "debt is 'illegal' with a view to writing it off."

On June 17, the committee released its preliminary findings, in which it concluded:

All the evidence we present in this report shows that Greece not only does not have the ability to pay this debt, but also should not pay this debt first and foremost because the debt emerging from the Troika's arrangements is a direct infringement on the fundamental human rights of the residents of Greece. Hence, we came to the conclusion that Greece should not pay this debt because it is illegal, illegitimate, and odious.

If Greece says debt is "illegal," other debtor nations will declare their debt invalid, too

In short, it doesn't appear as though the Syriza-led Greek government has any intention of repaying loans obtained by a prior government, in an attempt to keep the country solvent. Now, it appears, by the stroke of a pen, the current government is ready to simply make the debt vanish like a magic act, leaving the taxpayers of the EU on the hook for what now seems like a bad decision.

As noted by the website Zero Hedge:

As we predicted over four years ago, Greece has effectively just declared that it will no longer have to default on its IMF (or any other debt - note that the dreaded "Troika" word finally makes an appearance after it was officially banned) simply because that debt was not legal to begin with, i.e. it was "odious."

Such an arbitrary declaration creates a dilemma for ECB and IMF officials currently trying to negotiate a deal that would make it easier for Greece to make a debt payment that is critically close to being due.

If Greece is allowed to simply vacate its debt, of its own volition, that raises the specter that other debtor nations could follow suit; peripheral EU nations will likely demand in short order that their debts be declared "odious" and "illegal" and, thus, null and void.

Pending "emergency"

"And another question: when Greece says the debt was illegal and it no longer has to make the June 30 payment, what will be the Troika's response: confiscate Greek assets a la Argentina, declare involutnary default, sue it in the Hague? Good luck," noted Zero Hedge.

More from the Truth Committee's findings:

It has also come to the understanding of the Committee that the unsustainability of the Greek public debt was evident from the outset to the international creditors, the Greek authorities, and the corporate media. Yet, the Greek authorities, together with some other governments in the EU, conspired against the restructuring of public debt in 2010 in order to protect financial institutions. The corporate media hid the truth from the public by depicting a situation in which the bailout was argued to benefit Greece, whilst spinning a narrative intended to portray the population as deservers of their own wrongdoings.

Clearly, EU and IMF negotiators are concerned about the lack of progress in the Greek debt talks, in particular the Greek government's unwillingness to even discuss options.

On June 15, ECB officials were said to be drafting plans to impose capital controls in Greece because no deal looked likely by the weekend, when a payment was due.

"Greece will be handed an ultimatum deal and be faced with draconian measures if it doesn't get closer to a deal during a eurozone finance ministers meeting this week," the UK's Telegraph reported, citing a German newspaper.

ECB officials warned of a pending "emergency" if no deal is reached.

Sources:

http://www.zerohedge.com

http://www.theguardian.com

http://www.telegraph.co.uk