21st Oct 2016

Bailout troika 'in breach' of EU human rights laws

Austerity programmes agreed with the troika of international lenders (the European Commission, European Central Bank and International Monetary Fund) are in breach of the EU's Charter of Fundamental Rights, according to a German legal expert.

Andreas Fischer-Lescano, a professor of European law and politics at the University of Bremen was tasked by the European Trade Union Confederation to look at the legality of so-called memorandums of understanding (MoU) signed between bailed-out countries and their lenders.

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He concluded that under the EU charter of fundamental rights, a legal text which became binding for member states in 2009, several austerity measures enshrined in the MoUs can be fought in courts.

"There are certain limits to what you can write in a memorandum of understanding. In a bank contract too, there are limits to what can be written, courts and laws are always limiting that. In international agreements it should be the same, the troika MoU is not beyond the law either," Lescano told this website.

He noted that a recent inquiry by the European Parliament (EP) into the work of the troika was right to question its legal basis, particularly the European Central Bank's lack of a mandate to demand structural reforms from national governments.

"But this is just part of the problem. The EP inquiry is almost not looking at all at the human rights component," Lescano added.

His study highlights that the MoUs "have seriously limited the autonomy of employers and trade unions to negotiate wages."

"In Ireland, wages had to be lowered by one euro per hour. And the rationale for this austerity measure is not even there. Because when autonomy is not working, the state has to supplement the lacking income, as it is in Germany."

Education and health care reforms prescribed in the memorandums are also questionable because they are focusing too much on cutting budgets, he said.

"It is true that at national level such measures are sometimes taken, but what is dangerous here with the troika is the bundling of all these austerity measures, which lead to serious consequences, especially for vulnerable groups."

He noted that the concept of “financial stability” was put above all other considerations. "But financial stability cannot be achieved without social stability," he said.

"What is missing is the EU taking its own responsibility for these measures. They always say responsibility for the adoption and application of these measures lies with member states. But without agreeing to these terms, there would have been no loans."

The German expert was wary about the prospect of a legal challenge in European courts being likely to repel the MoUs in their entirety, but he expressed hope that some adjustments to the troika programmes could be made.

"We are still at the beginning of the discussion, but it is very important to get out of this fragmentation regarding social measures. Social conflicts are being wrongly framed as national conflicts. It is a common European issue and countries are just being played against each other: siesta in Spain vs. hard work in Germany," he said.

Social charter

For its part, in its annual report published on Wednesday (29 January), the Council of Europe's social rights committee noted that public policies since 2009 have been unable to stem a generalised increase in poverty on the continent.

The committee identified some 180 violations of European Social Charter provisions on access to health and social protection across 38 European countries.

In the bailed-out countries, the committee found several breaches - particularly in terms of wages and social benefits.

Ireland was found in breach of the social charter for not ensuring the minimum levels of sickness, unemployment, survivor’s, employment injury and invalidity benefits.

Greece and Cyprus have "inadequate" minimum unemployment, sickness, maternity and old age benefits, as well as a restrictive social security system.

Spain also pays too little to workers on sick leave and restricts the right of other Europeans to have access to social security.

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