Sinn Féin - On Your Side

Matt Carthy MEP calls for Irish Legislation on "Vulture Funds"

7 July, 2015 - by Matt Carthy MEP

Sinn Féin MEP for the Midlands North West and member of the Economic and Monetary Affairs Committee, Matt Carthy, has highlighted the importance of establishing a new legal framework for sovereign debt restructuring not just for developing countries but also the impact that it would have for countries such as Ireland and Greece. He called for appropriate legal measures to be put in place in order to prevent “vulture funds” posing a risk to all future debt restructuring processes.


Carthy stated:

"These so called “vulture funds” and their actions are often of a highly speculative nature. In short, Vulture funds are predatory hedge funds that buy bonds of debt crises countries at rock-bottom prices on the secondary market. They refuse to participate in debt restructurings. They then sue the indebted nation for full payment, aiming to get a much better deal than the ‘collaborative’ creditors who agree to write off a share of their claims in order to get a debtor back on its feet.


"They pose a number of risks to all future debt restructuring processes, for both developing and developed countries.


"It is therefore absolutely imperative that safeguards are tabled in order to effectively deal with these concerns.


"This is of crucial importance now more than ever as Greece struggle to maintain financial stability and some rapacious creditors seek to take advantage of this with speculative trading.


"It is beyond shameful that Ireland voted against the UNs resolution which could prevent vulture funds holding indebted countries to ransom.


"At two different votes proposing the mechanism on debt restructuring processes, Ireland voted ‘No’. In the first vote, it was the only heavily-indebted country to vote against the initiative. Other heavily - indebted European countries – Spain, Greece, Italy – abstained.


"Despite our own harrowing and ongoing debt crisis, Ireland aligned itself with the finance capital centres of the US, Britain, Germany and Japan in voting against the initiative, on the basis that ‘market-oriented approaches’ are preferable.


“I call on the Irish Government to follow the lead of Belgium who has passed a law to cap how much these vulture funds can recoup from government debt.


"Such a law would send a strong signal to unscrupulous investment funds which speculate in a shameful manner on the back of people in difficulty and would be in both the interests of the Irish and Greek people. 

Connect with Sinn Féin