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Guyana Urges Return to Glass-Steagall at Historic OAS Meeting: Argentina Wins Strong Backing in Its War Against the Vulture Funds

July 4, 2014 (EIRNS)—The Minister of Transport and Water Works of Guyana, Robeson Benn, speaking in his capacity as Guyana’s Acting Foreign Minister at the hastily-called Meeting of Consultation of Ministers of Foreign Affairs of the Organization of American States (OAS) in Washington, D.C., Thursday, changed history by calling for a broad discussion across the Americas on Franklin Roosevelt’s 1933 Glass-Steagall law, and urging American legislators to reinstate the bill, since its revocation in 1999 had created the usurious speculative system which today is trying to destroy Argentina along with many other countries.

Benn invoked the idea presented by Malaysian former Prime Minister Mahathir, that "the international financial system and policy should revolve around the issue of not beggaring your neighbor, but prospering your neighbor." He then continued:

"I would like to pose the question, perhaps, as to whether we should not, out of this imbroglio, re-look at the overall question of the repeal of the Glass-Steagall Act in 1999 in the United States, which related to the activity of the banking system, the international financial institutions, mainly resident in the United States and in the United Kingdom. President Roosevelt, of the United States of America, established a banking act, signed off on the Banking Act of 1933, which set up firewalls between the activities of the banks, and on the questions of speculation in the financial system. There is, perhaps, the need now to take a look at putting back in place important sections of the Glass-Steagall Act which was repealed in 1999."

"And," Benn continued, "we know the devastation, the dislocations in the United States economy in 2008, had even more devastating, dislocating effects in the world financial system. So we need to perhaps review the question, or call upon U.S. legislators to pursue efforts to put back in place the type of regulation in the banking system which would prevent vulture funds, which would prevent this response whereby there is this form which I call the term ’modern day piracy,’ modern day piracy which has serious implications for the world economy and, particularly now in the case of Argentina, a very significant country in Latin America, severe implications for its economy and which would create a cascading effect in Latin America, and Central America, and elsewhere."

Benn concluded: "Guyana stands in solidarity with Argentina in rejecting and condemning the actions of vulture funds that put in jeopardy progress made by these countries... The dilemma of the Argentine people and government resonates with all developing countries. It is the moral responsibility of all stakeholders, including the American people and their government, to ensure that countries such as Argentina, which has made significant strides in improving their debt situation, [not have to adopt measures] which threaten the progress that has been achieved."

Benn’s was the final speech given before a vote was taken at the OAS meeting, in which the vast majority of the nations present delivered a standing ovation in favor of a resolution supporting Argentina’s efforts to reach

"fair, equitable and legal arrangements with 100% of its creditors,"

and expressed

"its full support to achieving a solution that seeks to facilitate the broad Argentine sovereign debt process."

This declaration was passed over "no" votes from two countries: Canada and the United States, which insisted on the placement of a footnote on the document stating:

"The United States cannot support this declaration, and notes that the issue remains in the judicial process in the United States."

Despite the ham-handed sophistry of the U.S. argument, regional solidarity with Argentina ran strong from the outset of the meeting, with many Foreign Ministers speaking fervently of the need to defend human beings, over finance. Most referred angrily to the "vulture funds," although the final declaration does not use that phrase

Notable was Venezuelan Foreign Minister Elias Jaua, who dramatically began his remarks by reading the opening paragraphs of a letter denouncing gunboat diplomacy to collect on debts, which he then informed the gathering was from the famous Dec. 29, 1902 letter written by Argentina’s Foreign Minister Luis Maria Drago, to his ambassador in the United States, in which he denounced the ongoing 1902 blockade of Venezuelan ports by German, Italian, and British gunships, in an effort to collect their debt. This became known as the Drago Doctrine, which established the principle that no creditor can collect a debt at the expense of the existence, sovereignty, and independence of a nation, citing "the famous Hamilton" that contracts between a nation and particular individuals "cannot be the object of compulsory force." Drago later described his Doctrine as the "financial corollary of the Monroe Doctrine."

Venezuelan Foreign Minister Jaua explained:

"That letter [by Drago] became a doctrine which established the principle that no sovereign State can be forcibly required to pay a debt, let alone be embargoed... That is why we have supported Argentina and will continue to support it in its legitimate claim over the sovereignty of the Malvinas Islands... That is why, 112 years after that letter of the worthy Foreign Minister Drago, we have come in the name of our Government and our people to say that Argentina cannot be compelled to pay under unacceptable conditions a debt which is immoral and has clear elements of illegality... What today is happening to Argentina will happen to every one of us... Ministers, let us do more than issue a call. Let us set ourselves the pressing task of redesigning the international financial economic system."

After the resolution was passed by the overwhelming majority of the OAS body, Argentine Foreign Minister Hector Timerman—who had opened the deliberations with a strong presentation, along with one by Economics Minister Axel Kiciloff on the basic issued involved in the vulture fund assault—concluded the meeting by stating his appreciation for the solidarity, "regretting" the no votes issued by the United States and Canada, and vowing that Argentina would enter its Monday negotiations with the vulture funds in some "luxurious office in New York City" armed with the knowledge that "we are not alone." That is not because we will be accompanied by the solidarity expressed here, Timerman stated, although that is also true, but because we will be recalling the ghosts, the faces of all of the victims of the vulture funds in nations around the world.