Odius debts
Posted by aogFriday, 11 April 2003 at 23:27 TrackBack Ping URL
The Brothers Judd had an interesting post on the concept of odius debt. This is argued from the analogy that as private citizens do not have to repay debts obtained fraudulently and without their permission, neither do the people of a state have to repay debts incurred by a illegitimate governments. While I think that this is an excellent idea, one of the problems, of course, is determining which governments are legitimate. Should there be a vote in the UN I suspect that the first government to be declared illegitimate would be the US.

However, there really isn't any need to get the UN involved. A state such as Iraq can be forgiven it previous debts in the US legal system. This would mean that no claim to collect such debts would be valid in any US court. The EUlite will of course whine and attempt to collect debts via European courts or the ICC. But even if a judgement were made against Iraq, how would it be collected? Wouldn't this simply mean that Iraq would trade only with the US and its close allies? This would be a way to aid Iraq, punish the EUlite and strengthen the ties between the US and Iraq.

The one downside would be that the EUlite might well attempt to sieze the $40 billion that has already been stolen from Iraq by the UN. It's possible that it would suffice for the US to veto any attempt to disperse the funds to a group other than the new Iraqi government. It might do well to stall the resolution of existing debt until that money has been secured for Iraq. On the other hand, the spectacle of France, Germany and Russia looting that account to line their own pockets would be quite the public relations coup for the Anglosphere.

But if one may indulge in a bit of fancy, one could imagine Iraq suing for the money in a US court, winning, and then demanding title to the UN headquarters if the UN refuses to pay. That would truly be a win–win scenario.