World Leaders Challenge 'Predatory Hedge Funds'

Addis Ababa, Ethiopia - July 13

At a United Nations development summit, world leaders, the International Monetary Fund and development organizations recommend the elimination of a type of hedge fund that preys on countries in financial crisis. So called “vulture funds” are featured in a global agreement to be signed this week at the Financing for Development Conference.

“These predatory funds undermine development and can destabilize a country’s economy,” said Eric LeCompte, Executive Director of the religious development organization Jubilee USA Network. “From Zambia to Peru, they target, litigate and collect aid monies that should be building schools and hospitals.”

When countries face economic hardship, "vulture funds" buy a country's debt cheaply and then sue for full repayment. After Zambia received international debt relief in 2006, a hedge fund called Donegal International sued Zambia to collect $55 million on a $15 million debt the fund purchased for $3.3 million on the secondary market. NML Capital sued Argentina over debt holdings and refused to participate in Argentina's debt restructuring. The Argentina case put a broader spotlight on this type of litigation.
“World leaders are saying enough is enough,” stated LeCompte who is attending the summit and participated in agreement negotiations. “The final agreement recommends changing contracts to prevent the behavior or legislating the funds out of existence.”

On July 1st, Belgium was the latest country to pass a law restricting this behavior. Three of the ten paragraphs in the United Nations agreement that focus on debt, state concern or recommend ways to stop these hedge funds. Two additional paragraphs promote aspects of global bankruptcy and responsible lending and borrowing which further deter this behavior.
“It’s inspiring to see the global community unified against this behavior,” noted LeCompte.

from here

The same world leaders, United Nations, International Monetary Fund and development organisations who say 'enough is enough' to this kind of predatory lending have no such opposition to the kind of lending about to be imposed on Greece, where the bulk of the fall out will hit the majority population, those who have already been suffering and struggling for years now. Worldwide countries are continuing to suffer and struggle under and against harsh financial conditions and austerity forced on them by decisions taken by their own leaders in compliance with international lending institutions.
What would be inspiring, to quote from the final sentence above, would be to see the global community, alive and kicking, unified in their challenge to the capitalist system. What would be inspiring would be to see a global majority coming together in solidarity knowing that together we could build a system to supercede capitalism that would undoubtedly improve the condition for us all.
Together we can achieve socialism.