Austerity and human rights I

This is the first of two posts on the topic of austerity and human rights. Today I report on a recent set of five cases taken against Greece. Tomorrow, I examine the possibility of applying EU law to challenge the way in which austerity is imposed by the troika.

It would be a bit misleading to say that the Troika’s austerity packages breach human rights law. What can be said, though, is that, in five legal challenges, pension cuts in Greece imposed as part of the austerity package have been found to be in breach of European human rights law.

Three weeks ago, the European Committee of Social Rights (ECSR), a less-well known sibling to the European Court of Human Rights, published its rulings in the five cases challenging cuts to pensions.

The cuts are deep and wide-ranging. They are also complex because the apply to different pension schemes and pensioners of different statuses. I will not list all of the cuts here, but the approach and severity is indicated by the following three points made by the complainant trade unions:

• pension payments have been reduced by between 50 and 70 percent, depending on the professional category (see paragraph 57 of Decision 76/2012);
• pensioners under 55 years old with a pension of less that €1,000 [per month] suffered a 40 percent cut (paragraph 58); and
• auxilliary pensions have been reduced by approximately 30 percent.

The Greek government tried to argue that the cuts were necessary because of its obligations to the troika. The ECSR rejected that line of argument.

With regard to the observation made by the Government to the effect that the rights safeguarded under the 1961 Charter have been restricted pursuant to the Government’s other international obligations, namely those it has under the loan arrangement with the EU institutions and the International Monetary Fund, the Committee considers that the fact that the contested provisions of domestic law seek to fulfil the requirements of other legal obligations does not remove them from the ambit of the Charter.

The five unions that brought the complaints alleged that the cuts that had been imposed on pensioners breached the rights of the pensioners under Article 12.3 of the European Social Charter. The ECSR also mentioned that Article 12.2 was relevant to the case:

Article 12 – The right to social security
With a view to ensuring the effective exercise of the right to social security, the Contracting Parties undertake:
[…]
2. to maintain the social security system at a satisfactory level at least equal to that required for ratification of International Labour Convention No. 102 Concerning Minimum Standards of Social Security;

3.  to endeavour to raise progressively the system of social security to a higher level;
[…]

The ECSR had three grounds for finding that Greece is breaching its human rights obligations. There is lots that legal scholars could say about the three bases for the finding, but some points are worth mentioning here.

The sharpest rebuke for the Greek government is in paragraph 81 of Decision 76/2012 (and repeated in paragraph 77 of the other four Decisions):

[…] the effects of the adopted measures risk bringing about a large scale pauperisation of a significant segment of the population […]

‘Pauperisation’ is strong language for a legal body. The following may not be the language of a legal study but: the ECSR’s choice of word is a clear and vigorous attack on the Greek government’s policies.

Second, the ECSR also found that the measures

have been introduced in a manner that does not respect the legitimate expectation of pensioners that adjustments to their social security entitlements will be implemented in a manner that takes due account of their vulnerability, settled financial expectations and ultimately their right to enjoy effect[ive] access to social protection and social security

An interesting point in that text is that pensioners have expectations. They are important enough to mention twice: as “settled” and “legitimate financial”. Any cuts must take account of those expectations. If that approach is adopted by other legal bodies that interpret and apply human rights standards — such as the Court of Justice of the EU and national constitutional courts (the Supreme Court in Ireland) — then it would be a severe challenge to the zeitgeist, not just in pensions but in other economic relations too. For example, underlying thrust in current policy on pensions generally is to close defined-benefits schemes — schemes that allow expectations to which the ECSR has accorded protection — and move workers to defined contribution schemes, forcing workers to play the stock market with their savings for retirement. (And it is not just in pensions that expectations are under threat. The day after the ECSR published the five Greek decisions, the UK Chancellor was engaged in a battle with the House of Lords on legislation which would see worker’s employment rights reduced in exchange for shares — and the financial risks that go with that — in the companies they work for.)

Third, the ECSR found that the Greek Government

has not conducted the minimum level of research and analysis into the effects of such far-reaching measures that is necessary to assess in a meaningful manner their full impact on vulnerable groups in society. Neither has it discussed the available studies with the organisations concerned, despite the fact that they represent the interests of many of the groups most affected by the measures at issue

If the Greek government did not have access to research and analysis, then it is reasonable to assume that the troika did not have such research and analysis either, a point I return to in tomorrow’s post. It is a basic point about making any policy: knowing what the effect will be. This third finding also has a second point: the lack of discussion with the organisations concerned. This is in keeping a little-studied strand in the ECSR’s case-law, which it has mainly developed under Article 30 of the Revised European Social Charter, which concern the right to protection against poverty and social exclusion.

All of that prompts the question: what practical importance does this have? I do not know the standing of ECSR decisions in Greek domestic law, so I do not know what effect the decisions will have on the behaviour of the Greek government. I can say that if these had been Irish cases, the rulings would have meant little: although the decisions of the ECSR are binding on the State, in Ireland they have no legal effect in the State. That is, they do not change internal law and the Irish courts would not be bound by them if the citizens tried to use ECSR decisions to force the government to change its course. (The exceptions to this general rule are EU law and rulings and judgments of the European Court of Human Rights when they do not conflict with the Constitution.) In fact, under Article 45 of the Constitution, the Irish courts are prohibited from adjudicating on social policy. (Another possibility, which I do not know enough about, it that the right to private property in Article 43 might be used to fight a cut to a pension.) And there is little evidence — none that I know of — that the State changes its policy to comply with obligations under ECSR case-law. (A few months ago I was at a book launch where I met a senior civil servant who has responsibility for policy on a particular area covered by one aspect of ECSR law. Over the nibbles, I mentioned a ruling that affected Ireland. The civil servant said that when he first saw a note on the ruling circulated in his department, he was concerned, but he stopped worrying when he realised it was from the ECSR, and not the EU Court of Justice: “Strasbourg can’t fine us”.)

A final point is that the rulings of the ECSR do not apply to the EU and its institutions (or to EU member states by virtue of their membership of the EU). The role of the EU is important, because two parts of the troika — the European Commission and the ECB — are EU institutions. The question of how they might be brought to account is explored tomorrow.