By VW Staff. Originally published at ValueWalk.
As the UN voted to approve global bankruptcy principles for sovereign debt passed Tuesday – and economist Joseph Stiglitz delivered a key note speech with some harsh words for the Greek deal – the questions that are being whispered in UN and IMF corridors most commonly center on “why?”
Stiglitz questions sustainability of Greek deal as behind the scenes question being asked is “why?”
With a Greek delegation attending the UN bankruptcy process meeting for the first time, they looked on as both on and off the record debate wondered why Greece accepted the deal they did? As Joseph Stiglitz chastised the Greek deal, saying Troika policies remind him of a 19th century debtors prison, the big question that are not being asked are those insiders want answered most, according to UN sovereign debt expert and Jubliee USA Executive Director Eric LeCompte.
Two significant issues that strangely are not being asked include: Why did Greek Prime Minister Alexis Tsipras so quickly and easily turn tail and violate his campaign pledge? Why isn’t the issue of the Troika violating their own covenant in the Greek bailout being addressed in media reports?
“The question being asked is not if Greece will head into financial crisis, but when it will happen,” LeCompte, fresh of participating in the UN meeting, told ValueWalk in an interview. LeCompte has been involved behind the scenes in the Greece debt negotiations and has worked with international organizations regarding unregulated derivatives. “The deal is unsustainable as defined by the Troika’s own documents. With so many countries facing debt crises, we urgently need solutions to protect investors” and citizens from all countries, he said.
Pope weighs in on key debt relief topic and UN moves to create global bankruptcy process
LeCompte noted that, just as Pope Francis weighed on climate change recently, he is actively concerned regarding the global debt crisis. On July 13, Pope Francis endorsed a global bankruptcy process while speaking to reporters in Latin America. “If a company can declare bankruptcy,” the Pope asked, “why can’t a country do so?”
LeCompte said he sees the U.N. and the International Monetary Fund trying to vie to become the international location for sovereign debt bankruptcy to be resolved, but such measures, while likely to handily pass the UN General Assembly, are likely to run into U.S., European and Japanese resistance which could sing a global and orderly debt process.
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