The people of Europe must take power into their own hands. This week Irish campaigners completed phase one of their debt audit. The purpose of a debt audit is to allow the citizens’ of a country to examine that country’s lending history and to hold their politicians to account.

Excerpted from Nick Dearden, director of the Jubilee Debt Campaign:

“UN body UNCTAD released a report earlier this week examining the folly of austerity saying “Austerity measures, as the main means of tackling the euro crisis without regard for regional demand growth, may badly backfire.” It also points out the absurdity of devising economic ‘solutions’ to please those institutions that got us into the financial crisis – rather than ensuring they cannot do so again.

Instead of austerity, we should be standing up to financial institutions to prevent them from dictating terms to indebted countries. After all the European banks bear far more responsibility for the reckless lending that has consumed Europe than do the people of Greece who are bearing the pain for it. Neither do banks or governments who have lent recklessly have any imperative to question whether their lending was really just, fair or accountable. Every system of justice in the world would point to the need for a neutral body which could also adjudicate on the liability of the lender.

But even in the fantasy world of European politicians in which the poor of Greece really were responsible for the financial crisis, their ongoing punishment is utterly futile. In 1982 the world stood at a financial precipice as many government’s told western banks they could not repay their loans. In the oft-repeated cycle, the IMF stepped-in to bailout the banks by buying the debt for themselves. Two long decades of austerity and debt followed. The world only became more unequal, more unstable and more prone to crisis. The debt crisis went from bad to worse.

In contrast, compare what happened after the Second World War. In 1953, under the London Accord, half of Germany’s war debt was cancelled by, amongst others, Greece. As German campaigner Jurgen Kaiser puts it “Nothing collapsed or deteriorated because of this debt relief. To the contrary…the accord [w]as one of the cornerstones of the subsequent German ‘economic miracle’.” Moreover, “debt relief for Germany was not conditional upon the implementation of any austerity or structural adjustment program”.

The current debt system ignores this example, rather it reinforces the power of the lender. This noxious relationship between international lenders and borrowers allows European governments to get away with pursuing policies which benefit only the profit margins of their banks. It urgently needs changing, which is why campaigners are calling for a ‘Debt Court’ which would remove power from the hands of the lenders, and judge the fairness of both debts and the loans on which they were based.

Until that time the people of Europe must take power into their own hands. This week Irish campaigners completed phase one of their debt audit. The purpose of a debt audit is to allow the citizens’ of a country to examine that country’s lending history and to hold their politicians to account. Conducted with official backing, it would form an essential element in the adjudication of a Debt Court.

The Irish audit found that up to 82% of long-term government bonds are in overseas ownership, with identities shrouded by the opacity of the deeply unaccountable financial system. It prompted Unite the Union to declare “Ireland is acting as a roulette wheel for the world’s largest financial gamblers as a result of a massive increase in secondary trading on its sovereign debt”.

The Greek and Irish people are suffering – like many around the world before them – because of the power of an unaccountable and self-interested financial system. A Debt Court, if set-up properly, would remove power from the hands of the financial markets and protect the rights of those living in ‘debtor’ states. Without a just debt system, the only way for people to preserve their rights is to struggle for them. European leaders will keep bleeding Greece until its people can take it no more. If we do not want the tragedy that has befallen Greece to reoccur, we must support the Greek people. “