The Rt Hon George Osborne MP

Chancellor of the Exchequer

HM Treasury

1 Horseguards Road

London

SW1A 2HQ

Date: 23^rd January 2014

Ref: ML.C0117.AR.12.01.14

Dear George,

I have recently been contacted by constituents concerned about the activities of so-called ‘vulture funds’ that are profiteering from debt crises in forty of the world’s most impoverished countries.  They pointed out that the UK’s Debt Relief (Developing Countries) Act took an important step towards curbing such activity, but that the threat is far from over. 

My constituents give the example of the vulture fund Dart Management, based in the Cayman Islands, which made €100 million from Greece’s debt crisis in a single day, shortly after taxpayers had bailed Greece out.  In Argentina, vulture funds are demanding a $1.4 billion payout more than a decade after Argentina’s 2001 debt crisis.  These vulture funds risk making debt crises even more difficult to resolve fairly and effectively, as everyone from the IMF to the US Government have acknowledged, and punish ordinary citizens for financial matters in which they had no say to begin with. 

The UK plays a crucial role in this little-known aspect of global finance because many sovereign debt contracts are written under English law.  I urge you to stop vulture funds profiteering from debt crises now and in the future by responding positively to Early Day Motion 666, which calls on you to:

• share the UK’s experience of legislating on vulture funds with the Government of the United States of America;
• legislating to prevent vulture funds from using UK courts to bypass internationally agreed debt restructuring for Argentina and Greece;
• supporting the creation of a fair, independent and transparent arbitration mechanism for sovereign debt, so that all creditors share equally when unsustainable debts have to be reduced.

I would appreciate hearing what action you will be taking to end the disgraceful practises of vulture funds once and for all and I look forward to receiving your reply so that I can pass it on to my constituents.

Yours sincerely,

Caroline Lucas, MP, Brighton Pavilion