Osborne must stop the Greek vultures
This week the Greek government paid around €400 million to vulture fund Dart Management, which has refused to take part in March’s debt restructuring. Dart Management is likely to have bought the debt at a fraction of its value, and so made a large profit. The payment is the first of many which could be made to vulture funds making huge profits on the back of the suffering of the Greek people.
Well-over 90% of Greece’s creditors have taken part in a debt restructure, which reduced the amount they were owed by around 50%. Vulture funds have refused to take part. The Greek debt held by vulture funds is in foreign, rather than Greek, law. Greece passed legislation to make holders of Greek law debt take part in the debt restructure, but the foreign-law contracts are outside their control. Many of these contracts are in English law.
Nick Dearden, Director of Jubilee Debt Campaign said:
“Greece’s European neighbours have done enough damage to the Greek economy through imposing austerity while bailing out reckless banks. Now the threat of British courts is being used to squeeze the last drop of blood out of the Greek people.
“The Greek debt write-down was actually a very good deal for bondholders who were paid 50% of the face-value at a time when those same bonds were actually trading for around 35% value, and they got a cash incentive. But that was not good enough for the vultures. Whilst the Greek welfare state collapses and society suffers rises in rates of suicide, murder and HIV, Kenneth Dart can sit back on his 220ft yacht in the Cayman Islands and count his winnings.
“Whichever way you look at it, we cannot allow the threat of the British 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.”
In 2010, the UK government passed a law to prevent vulture funds which had refused to take part in internationally agreed debt relief from using British courts to sue 40 of the most impoverished countries.
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For more information contact JDC on 020 7324 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.
2. The Debt Relief (Developing Countries) Act 2010 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. The UK could introduce a similar law to Greece, forcing all creditors holding Greek debt in English law to take part in the debt restructure. An alternative would be a law limiting the amount of profit which could be made on debts sold on secondary markets - as has already been proposed once in the US Congress.