Dear friends,
Profiting from Crisis is a story about how corporations, backed by lawyers, are using international investment agreements to scavenge for profits by suing governments from Europe’s crisis countries. It shows how the global investment regime thrives on economic crises, but is very uneven in who it benefits. While speculators making risky investments are protected, ordinary people have no such protection and – through harsh austerity policies – are being stripped of basic social rights.
Profiting from Crisis looks closely at how corporate investors have responded to the measures taken by Spain, Greece and Cyprus to protect their economies in the wake of the European debt crisis. In Greece, Postová Bank from Slovakia bought Greek debt after the bond value had already been downgraded, and was then offered a very generous debt restructuring package, yet sought to extract an even better deal by suing Greece using the Bilateral Investment Treaty (BIT) between Slovakia and Greece. In Cyprus, a Greek-listed private equity-style investor, Marfin Investment Group, which was involved in a series of questionable lending practices, is seeking €823 million in compensation for their lost investments after Cyprus had to nationalise the Laiki Bank as part of an EU debt restructuring agreement. In Spain, 22 companies (at the time of writing), mainly private equity funds, have sued at international tribunals for cuts in subsidies for renewable energy. While the cuts in subsidies have been rightly criticised by environmentalists, only large foreign investors have the ability to sue, and it is egregious that if they win it will be the already suffering Spanish public who will have to pay to enrich private equity funds.
Profiting from Crisis reveals how the public bailout of banks that led to the European debt crisis could be repeated with a second public bailout, this time of speculative investors. Corporate investors have claimed in arbitration disputes more than 700 million euros from Spain; more than one billion euros from Cyprus and undisclosed amounts from Greece. This bill, plus the exorbitant lawyers’ fees for processing the cases, will be paid for out of the public purse at a time when austerity measures have led to severe cuts in social spending and increasing deprivation for vulnerable communities. In 2013, while Spain spends millions on defending itself in lawsuits, it cut health expenditure by 22 per cent and education spending by 18 per cent.
Read the full report "Profiting from crisis": http://www.tni.org/sites/www.tni.org/files/download/profiting_from_crisis_0.pdf
Cecilia Olivet
Economic Justice Program
Transnational Institute
telephone: +31 20 662 66 08
e-mail: ceciliaolivet@tni.org
skype: mcolivet
twitter: CeOlivet
linkedin: http://www.linkedin.com/in/ceciliaolivet
Profiting from Crisis is a story about how corporations, backed by lawyers, are using international investment agreements to scavenge for profits by suing governments from Europe’s crisis countries. It shows how the global investment regime thrives on economic crises, but is very uneven in who it benefits. While speculators making risky investments are protected, ordinary people have no such protection and – through harsh austerity policies – are being stripped of basic social rights.
Profiting from Crisis looks closely at how corporate investors have responded to the measures taken by Spain, Greece and Cyprus to protect their economies in the wake of the European debt crisis. In Greece, Postová Bank from Slovakia bought Greek debt after the bond value had already been downgraded, and was then offered a very generous debt restructuring package, yet sought to extract an even better deal by suing Greece using the Bilateral Investment Treaty (BIT) between Slovakia and Greece. In Cyprus, a Greek-listed private equity-style investor, Marfin Investment Group, which was involved in a series of questionable lending practices, is seeking €823 million in compensation for their lost investments after Cyprus had to nationalise the Laiki Bank as part of an EU debt restructuring agreement. In Spain, 22 companies (at the time of writing), mainly private equity funds, have sued at international tribunals for cuts in subsidies for renewable energy. While the cuts in subsidies have been rightly criticised by environmentalists, only large foreign investors have the ability to sue, and it is egregious that if they win it will be the already suffering Spanish public who will have to pay to enrich private equity funds.
Profiting from Crisis reveals how the public bailout of banks that led to the European debt crisis could be repeated with a second public bailout, this time of speculative investors. Corporate investors have claimed in arbitration disputes more than 700 million euros from Spain; more than one billion euros from Cyprus and undisclosed amounts from Greece. This bill, plus the exorbitant lawyers’ fees for processing the cases, will be paid for out of the public purse at a time when austerity measures have led to severe cuts in social spending and increasing deprivation for vulnerable communities. In 2013, while Spain spends millions on defending itself in lawsuits, it cut health expenditure by 22 per cent and education spending by 18 per cent.
Read the full report "Profiting from crisis": http://www.tni.org/sites/www.tni.org/files/download/profiting_from_crisis_0.pdf
Cecilia Olivet
Economic Justice Program
Transnational Institute
telephone: +31 20 662 66 08
e-mail: ceciliaolivet@tni.org
skype: mcolivet
twitter: CeOlivet
linkedin: http://www.linkedin.com/in/ceciliaolivet
