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Why Euro zone countries’ debt to the ECB must be cancelled

Tuesday 7 December 2021, by Éric Toussaint

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Since the beginning of the coronavirus pandemic public debt in the eurozone has increased by an average of 20%.

The reason for such an increase is straightforward: instead of finding the necessary new resources by taxing the wealthiest 1% and the big corporations as the CADTM and others had been demanding, governments have preferred borrowing, thus increasing the weight of illegitimate debt.

The past 40 years of neoliberalism and its repeated crises has widened the gap between the working classes and wealthy asset-owners and increased the burden of public debt in the continual process of capital accumulation. The coronavirus pandemic does not affect all social classes equally. Big corporations such as the GAFAM companies (Google, Amazon, Facebook, Apple, Microsoft) have garnered huge profits thanks to the lockdowns; Big Pharma companies such as Pfizer, Moderna, AstraZeneca, Johnson & Johnson, Curevax, Merck, have had windfalls from the pandemic by selling vaccines and treatments at exorbitant prices (see Coronavirus: Global Collective Commons vs Big Pharma), major banks and investment funds have also benefited from government grants as have big energy sector corporations.

Refusing to implement a Covid tax on the wealthiest and on big corporations has not only increased inequalities but also resulted in a steep increase of the debt, as tellingly illustrated in Europe. The total public debt in the Euro zone amounts to €12 trillion. From early 2020 to July 2021, Euro zone debt rose, on average, from 86% of the GDP to 100%. A number of countries have a much higher debt/GDP ratio. The public debt of Belgium and France is close to 120% of their GDP; for Spain 125%; for Portugal 140%; for Italy 160%. As to the public debt of Greece it reaches 210% while at the worst time of the 2015 debt crisis it amounted to 180% and the Troika pretended it would go down.

The ECB holds a significant portion of the Euro zone public debt. At the moment of writing these lines, it has over €3.9 trillion in eurozone sovereign securities, i.e. over 30% of the above mentioned €12 trillion. Figures for each country are available on the ECB website. The ECB buys sovereign securities of eurozone countries through two programmes: 1. the Pandemic emergency purchase programme (PEPP) and 2. the Public sector purchase programme (PSPP).

Some examples: The ECB holds about €140 billion of the Belgian debt, €730 billion of the French debt, €360 billion of the Spanish debt and €675 billion of the Italian debt.

The ECB purchased the securities from private banks as it does not grant loans to Euro zone member States. On the other hand, States repay these bonds to the ECB.

Since 2020 many economists and social movements have demanded the cancellation of debts held by the ECB, see the call “Cancel the public debt held by the ECB and ‘take back control’ of our destiny” signed by over 150 economists published in various media in February 2021. The ECB can cancel debts held on eurozone countries. It is a mere bookkeeping operation that does not raise any difficulty, and a central bank cannot go bankrupt.

The ECB board and European governments rejected this proposal because they favour an increase in public debt. It will allow them and their institutions to quickly roll out the good old new discourse. After claiming that States could increase their debts, they will say that they must now cut expenses, reduce public investments, introduce new structural measures in old-age pensions and social security systems, restore the rules on fiscal deficit, which have been temporarily suspended but in no case cancelled. In other words, they are impatient to return to the austerity policies inscribed in the European Treaties.

This extended period of pandemic has been used to flaunt rights and liberties. The cancellation of the public debt held by the ECB must be considered an emergency measure to secure public health. If so, it would reduce the Euro zone countries’ debt by about 30%. Debt repayment would be less crushing, and as a consequence public authorities would find fresh resources to increase expenses in such fields as health care, social solidarity, struggle against the ecological crisis and climate change. It is high time that the collective interest of the peoples of Europe take the upper hand on the tyranny of financial markets.

What’s more, the precedent of cancelling of ECB held debts would deprive the ECB of a coercive instrument that is uses to enforce its neoliberal agenda. Indeed, as long as the ECB is the Eurozone countries’ main creditor, it threatens those who are reticent to the neo-liberal doxa, to stop buying their debts or to refuse them as collateral, which would increase the cost of their new loans. That is exactly what happened with Greece in 2015, and what it threatened Italy with in the spring of 2019.

Taking this tool away would be a victory.

But we must not forget that besides the cancellation of debts held by the ECB there are other options. A popular government can unilaterally suspend debt repayment to the ECB, which will force it to negotiate and make concessions. This would prompt other governments to follow suit. To this end, citizens’ support of a popular movement demanding an audit of all debts as a key instrument to establish their illegitimate, illegal, odious or/and unsustainable parts that ought to be cancelled, is of the utmost importance. This is still an essential strategic move today.

The fears that in case of cancellation, the financial markets and the various private creditors would demand higher interest rates to further finance governments, is unfounded. All governments that benefited from a substantial reduction of its debt had access to less costly loans than before the cancellation. Indeed, creditors consider that a country with a low level of indebtedness is more creditworthy.

Obviously debt cancellation is not the ultimate solution, other measures are necessary: higher taxes on the wealthiest 1% and on big corporations as we have demanded from the start of the pandemic; fighting tax evasion with high fines on evaders, the suspension of the banking licence for banks that act as intermediaries for abusive tax avoidance, the elimination of European tax havens, the public ownership of key sectors of the economy,… Higher taxes on the wealthy must be combined with a reduction of taxes on the majority of people, such as a lowering of VAT on basic goods and services, such as energy. On the other hand, taxes on luxury goods must be increased.

Confronting the current social crisis inevitably means fighting inequalities. We have to fight multiple, interconnected and increasing inequalities and act on their sources such as unfair tax policies, austerity measures and the power of big corporations. In short, we have to focus on redistribution of wealth and resources as the main point of an eco-socialist programme. Because our lives are worth more than their profits, let us tear away the straitjacket of the debt.

Translated by Mike Krolikowski and Christine Pagnoulle


  • Éric Toussaint, spokesperson for CADTM International
  • Miguel Urban, MEP, member of Anticapitalistas
  • Cristina Quintavalla (ATTAC-CADTM Italy)
  • Paul Murphy, member of the Irish parliament People Before Profit
  • Andrej Hunko (Die Linke), member of the Bundestag and the Council of Europe
  • Jean-François Tamellini, Secretary General of the trade union FGTB Wallonia
  • Catherine Samary, economist, member of the Scientific Council of ATTAC France
  • Anne-Marie Andrusyszyn, Director of CEPAG
  • Olivier Bonfond, economist CEPAG
  • Christine Mahy, General and Political Secretary of the Walloon Anti-Poverty Network (RWLP)
  • Fred Mawet, ATTAC Brussels activist
  • Maria Bolari, former Member of the Greek Parliament
  • Maja Breznik, sociologist, Slovenia
  • Christine Pagnoulle, honorary lecturer at the University of Liège, secretary of ATTAC Liège
  • Eric Coquerel (France Insoumise) deputy at the National Assembly
  • Brigitte Ponet, militant of CADTM Belgium
  • Sonia Mitralias, feminist activist, former member of the Commission for the Truth about the Greek debt
  • Peter Wahl, economist, co-founder of Attac Germany
  • Stathis Kouvelakis, philosopher, Revue Contretemps
  • Daniel Richard, regional secretary of the trade union FGTB Verviers &amp
  • German-speaking Community
  • Rastko Mocnik, sociologist, Slovenia
  • Jean-François Ramquet, regional secretary of the trade union FGTB Liège-Huy-Waremme
  • Herman Michiel, editor of Ander Europa
  • Manon Aubry, MEP, France Insoumise
  • Carlos Sánchez Mato, Professor of Applied Economics. Complutense University of Madrid. Responsible for the development of the Izquierda Unida programme
  • Manuel Garí Ramos, economist and activist of Anticapitalistas
  • Mikel Noval and Janire Landaluze (ELA trade union, Basque Country)
  • Fátima Martín, journalist, promoter of the digital media FemeninoRural.com
  • Jaime Pastor, Viento Sur magazine
  • Paul Émile Dupret, lawyer, A contre-courant
  • Christine Poupin, NPA
  • Corinne Gobin, political scientist FNRS/ Université Libre Bruxelles
  • Tijana Okić, Crvena association, Sarajevo
  • Alexis Cukier, philosopher, Attac, CGT, Let’s join
  • Angela Klein review SOZ, Germany
  • Felipe Van Keirsbilck, secretary general of the Centrale Nationale des Employés (Belgium)
  • Leïla Chaibi, MEP, France Insoumise
  • Riccardo Petrella, professor emeritus, UCL, Agora des Habitants de la Terre
  • Jan Malewski, editor of the magazine Inprecor
  • Pierre Khalfa, Copernic Foundation
  • Michael Lowy, emeritus researcher, CNRS
  • Ludo De Brabander, spokesman for Vrede vzw (Belgium)
  • Pierre Delandre, Sociologist of money, executive, associate researcher at Etopia
  • Nicolas Dufrêne, director of the Rousseau Institute
  • Gaël Giraud, director of research at the CNRS and honorary president of the Rousseau Institute
  • Noël Lechat, General Secretary of the CGT Federation of Research Companies
  • Danièle Obono, (France Insoumise) member of the National Assembly
  • Patrick Saurin, trade unionist in the banking sector, Sud Solidaires
  • Penelope Duggan, editor of the magazine International Viewpoint (France)
  • Martine Orange, journalist Mediapart
  • Anne-Sophie Bouvy, researcher in public law at the University C. Louvain
  • Stavros Tombazos, Professor of Political Economy, University of Cyprus
  • Pierre Galand, honorary senator, association activist (Belgium)
  • Raoul Hedebouw, president of the PTB, federal deputy (Belgium)
  • Ida Dequeecker, feminist activist (Belgium)
  • Willem Bos, editor of Grenzeloos
  • Costas Lapavitsas, Professor of Economics at SOAS and former member of the Greek Parliament
  • Yorgos Mitralias, journalist, former member of the Commission for the Truth about the Greek debt
  • Alda Sousa, former Member of the European Parliament, Bloco de Esquerda, Portugal
  • Ludivine Bantigny, historian (France)
  • Roseline Vachetta, former Member of the European Parliament, NPA activist
  • Mauro Gasparini, Gauche anticapitaliste (Belgium)
  • Thomas Weyts, SAP (Belgium)
  • Véronique Danet, CGT bank trade unionist (France)
  • Raquel Freire, writer and film-maker (Portugal)
  • Rui Viana Pereira, CADTM activist in Portugal
  • Eulàlia Reguant, member of the Catalan parliament
  • Ugo Palheta, sociologist, University of Lille, co-director of Contretemps
  • Franck Gaudichaud, academic, co-president of France Amérique Latine
  • Pierre Rousset, co-publisher of the website Europe solidaires sans frontières (ESSF)
  • Teresa Rodríguez, former MEP, member of the Andalusian Parliament and spokesperson for Adelante Andalucía;
  • José María Gonzalez Santos, Mayor of Cádiz;
  • María Dantas, (Esquerra Republicana de Catalunya, ERC) Member of the Spanish Parliament;
  • Alice Picard, spokesperson Attac France;
  • Raphaël Pradeau, spokesperson Attac France; Ana Podvrsic, researcher, Austria;
  • Alex Callinicos, Emeritus Professor of European Studies, King’s College London;
  • Raymonde Poncet Monge, senator, Europe Écologie Les Verts;
  • Jérôme Gleizes, economist, vice-president of the Paris Ecologist Group, Europe Écologie Les Verts;
  • Bríd Smith, member of the Irish parliament People Before Profit;
  • Richard Boyd Barrett, member of the Irish parliament People Before Profit;
  • Gino Kenny, member of the Irish parliament People Before Profit;
  • Raquel Varela, history researcher at UNL (Lisbon), president of the International Association Strikes and Social Conflicts;
  • Philippe Poutou, NPA, municipal councillor of Bordeaux, presidential candidate in France;
  • Olivier Besancenot, NPA, former presidential candidate in France;
  • Justin Turpel, former deputy dei Lénk - La Gauche, Luxembourg ;
  • Giorgos Galanis, Goldsmiths, University of London;
  • Stelios Foteinopoulos, International public policy expert and justice campaigner & former European Parliament Policy advisor on Economic and Financial Affairs and justice campaigner;
  • Tassos Anastassiadis, member of General Council of POESY (Federation of greek journalists);
  • CADTM Italy;
  • ATTAC Italy
  • José Gusmão, member of the European Parliament, The Left Bloc (Portugal)
  • Franziska Hildebrand, International solidarity: stop austerity! activist, Die Linke.SDS Hamburg, Germany;
  • Elias Gläsner, International solidarity: stop austerity! activist, Die Linke.SDS Hamburg, Germany;


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