Eric Tousaint’s study of the odious debt doctrine
by Eric Toussaint
Part 3 - In Sack’s view, the rights of private creditors should override those of the nation
Nicolas Politis pointed out in his introduction that “former doctrines had lost sight of the fact that the obligation of successor States, as well as that of the original borrower, belongs to the creditors and not to their nation.”
Thus Sack considered private creditors’ interests to take precedence over those of the nation. The work Sack devoted himself to, aimed to convince the international community that there was a need for a code and international legal structures enabling a better guarantee of private creditors’ rights before the State. (p. XIV)
On this crucial matter, Sack’s orientation contrasts with that of other jurists, both in the 19th century and in his own era. For Luis Drago (Argentina), Carlos Calvo (Uruguay)|, and Gustave Rolin (Belgium), the idea is to protect debtor States against abuse from private creditors, often backed by their own States. At the time, private creditors were mainly banks and other institutions or private individuals residing in Great Britain, France, the USA or even Germany, enjoying the support of their governments, which did not hesitate to use gunboat diplomacy to recover debt.
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