70 years after Germany's debt relief - activists demand debt relief for countries of the Global South

27.03.2023 - 70 years ago today, the governments of France, the UK and the USA cancelled the enormous foreign debt of the German government. The international campaign led by activists from the Global South is taking this as an opportunity to demand the abolition of the enormous debts of countries in the Global South. That is why a rally is taking place today, as in many other places around the world.

On 27 February 1953, something happened that seems absurd from today's perspective: The governments of France, Great Britain and the USA cancelled more than half of Germany's debts from the two world wars - from 19.8 to 7.3 billion euros (38.8 to 14.4 billion DM) - and cancelled any compensation for the destruction of neighbouring countries. Today, such debt cancellations are hardly to be thought of. Countries of the global South like Sri Lanka, Pakistan, Zambia or Ghana are buried under mountains of foreign debt.

"If even Germany, which had debts from the First World War, but also from the Second World War, got debt relief, why should this not be possible for countries of the Global South today?", Abraham Dali of Debt for Climate asks himself.

Who owes whom?

The countries of the Global South that have such enormous foreign debts are, of all things, those that are hit hardest by the consequences of the climate crisis and at the same time have historically produced very few greenhouse gas emissions. Pakistan, for example, first experienced a deadly heatwave in 2022 with temperatures well above 40 degrees, followed immediately by equally deadly floods, the consequences of which have not yet been fully addressed. The mountains of debt also prevent affected countries from investing in adaptation to the consequences of the climate crisis or in a climate-friendly restructuring of society. Instead, they have to approve new projects to promote fossil energies, for example, in order to cover their debts. Such projects often have serious impacts on local people and their livelihoods and stand in the way of a climate-just society.

Debt for Climate therefore calls for the abolition of the external debt of the global South, so that the IMF and the World Bank can no longer force countries in the South to grant further concessions for the extraction of fossil raw materials in their country. This would allow billions of fossil energies to remain in the ground, thus taking a first important global step towards effective climate protection and at the same time putting an end to the debt case system built on neocolonial mechanisms.

Abolition of foreign debt

The Debt for Climate Switzerland group, part of the international Debt for Climate movement started and led by activists from the Global South, called attention to the responsibility of these two institutions today at 4pm in Geneva in front of the World Bank and on the Square of Nations. The activists also highlighted Switzerland's responsibility in its role in the Executive Board of the International Monetary Fund (IMF) and its role in the environmental degradation caused by Swiss-based multinationals and Swiss banks in the Global South.

"Countries of the Global North have been exploiting countries of the Global South for centuries. The current debts of the Global South still support colonial power structures, which are also reflected in the countries of the Global South. For example, in the highly topical case of lithium mining in Puno, in the south of Peru, the uprising of the mainly indigenous population throughout the country and the indifference of the North, which is dependent on the lithium for its own energy transition.", says Alexandra Gavilano of Debt for Climate.

Next actions by/with Debt for Climate:

On 5 and 6 March, there will also be the opportunity to interview Debt for Climate activists from Argentina and South Africa in Bern. Contact us by email if you are interested!

Images: https://flickr.com/photos/196678591@N06/

For enquiries:
Alexandra Gavilano, Media spokeswoman: 078 821 76 13 (DE / EN / SP / FR)
Abraham Dali: 079 515 46 14 (EN / FR / SP / IT)