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An ideology uncontained… June 16, 2015

Posted by WorldbyStorm in Austerity, British Politics, Economy, European Politics.

This should be required reading for some, a piece on research that unsurprisingly suggests:

In a wide-ranging analysis of Britain’s performance in the decades before and after 1979, economists at the University of Cambridge say the liberal economic policies pioneered by Thatcher have been accompanied by higher unemployment and inequality.

But, more importantly:

At the same time, contrary to widespread belief, GDP and productivity have grown more slowly since 1979 compared with the previous three decades.

It’s always been remarkable how tenaciously the trope of productivity and growth increasing under Thatcherism has taken hold, and how uncritically it has been received both on right and parts of the left, and former left. I suppose that’s the thing with narratives, they provide massive simplifications that allow for reiteration of certain points, whether accurate or not.

There was one area that there was change… but… a double-edged sword this:

“Financial liberalisation was the sole aspect of the liberal market reforms introduced into the UK, initially in 1971-73 and more consistently from 1979, which materially increased the rate of economic growth,” the paper said.
“The freeing up of finance led to a huge, and eventually unsustainable, expansion of household borrowing. This temporarily accelerated the growth of consumer spending and hence GDP and of house prices, but in 2008 contributed to a banking crisis and the longest recession for over a century.”

Important, perhaps, to note that it was the ideological approach that led to the more recent events rather than ‘Thatcherism’ as such

But note again how the crisis of the last decade has not seriously undermined the broader narratives about economics and enterprise despite – by any rational reading – suggesting that those narratives are fundamentally incorrect.

JobBridge and union discipline June 10, 2014

Posted by Tomboktu in Austerity, Employment Rights, Trade Unions.

An interesting item in the June 2014 issue of In Touch, the magazine of the Irish National Teachers’ Organisation (INTO), available to read online here.

On page 9, we have the following:

JobBridge Directive

Following extensive consultation with members and discussions at an INTO Branch and District Officers’ Conference on 12 November 2011, the CEC decided at a meeting on 17 November 2011 not to support the JobBridge National Internship Scheme for graduates. The scheme is viewed by INTO as being exploitative of newly qualified teachers.

The union backed that up with a Directive to members “not to participate in the JobBridge National Internship Scheme”.

The article does not clarify what the union means by “participate”. But it has caused problems within the union.

Since May 2013, 28 complaints against 22 members have been received and have/are being processed under Rule 104 and 105 of the INTO Rules and Constitution. These complaints have all been made by members alleging that an identified INTO member breached the INTO directive. In all cases, concilliation was unsuccessfully attempted to bring about a resolution of the matter.

When it was originally issued, that Directive led to queries, and in August 2013 the union’s

CEC confirmed its view to district secretaries […] that the INTO directive on JobBridge applies only to teaching positions within a school, but included posts advertised with other titles that were clearly designed to recruit a qualified primary teacher to a teaching poition.

It is not a good position for a union to be in to have 22 members, even in a large union like the INTO, undergoing a disciplinary process.

What the article does not provide information on is whether the 22 are newly qualified teachers who are alleged to have taken up JobBridge placements or are others such as school principals who are alleged to have recruited or facilitated the recruitment of qualiied teachers into JobBridge placements, or a combination of both.

It would be interesting to see if the directive could have any bite and provide the basis for the union to take legal indistrial action.

LMD: “Cheap Euroloans at a high cost” April 27, 2014

Posted by Tomboktu in Austerity, Economy, European Politics, European Union, Social Policy, Taxation Policy.
1 comment so far

Seeing as there is a European election under way, from the April issue of Le Monde Diplomatique‘s English language edition:

European leaders considered the introduction of new contractual agreements between the European Commission and member states at a summit in Brussels last December, as demonstrators protested outside about a free trade agreement between the EU and the US (1). If implemented, the new contracts could be the most powerful tool ever granted to the EU’s institutions for dismantling member states’ social welfare provisions.

The contractual arrangements — the Convergence and Competitiveness Instrument (CCI) — are based on a simple principle: in return for financial incentives, European states would be asked to sign up to macroeconomic reforms. These would affect social provisions, the economy and taxation, independently of powers already devolved to EU institutions. Given the Commission’s current priorities, it is easy to imagine that the “financial advantages” might well be conditional on the withdrawal of employment protection and reductions in welfare expenditure or the provision of corporate tax breaks.

The proposal has provoked strong scepticism in some member states, including some of Germany’s traditional allies, and there is strong resistance within the Council too. Even a moderate social mobilisation might find allies within the EU to stop the plan being adopted (or to remove its most problematic aspects). So the EU election campaign offers the European left — who have too often acted too late, and been repeatedly defeated since 2007 — a rare opportunity to act.

Welfare ‘reform’ in the UK and public support. February 26, 2014

Posted by WorldbyStorm in Austerity, British Politics, The Left.
1 comment so far

A small snippet from the always useful UK Polling Report.

Also worth noting there is an interesting non-Scotland related question – YouGov repeated a question from last April about the government’s welfare reform package as a whole, freezes, caps, bedroom tax, etc. Back in April 2013 56% of people said they supported them, 31% were opposed. Now 49% support them, 38% are opposed – so still more in support than against, but a significant movement over the last year.

A depressingly high figure of support, but suggestive of a situation where reactionary measures can be pushed back against and that public opinion is far from set on such matters.

Beyond belief… February 20, 2014

Posted by WorldbyStorm in Austerity, British Politics.

here’s an example of contemporary victim blaming, the line put forward by the British government that increased demand for food banks was due to ‘their being more of them’.

But as the Guardian notes today, in a report commissioned by the British government itself:

…found that a combination of rising food prices and shrinking incomes, together with ongoing issues such as low pay and increasing personal debt meant that an increasing number of families could no longer afford to buy sufficient food for their household needs.
Benefits payment problems – either administrative errors that can leave claimants without cash for weeks a time, or the temporary withdrawal of benefits as a result of sanctions – are a factor in the increase in demand for food aid, the report found.

This is in stark contrast to the line put forward by that government:

Ministers have repeatedly said there is no robust link between welfare changes and food bank use, while the welfare minister Lord Freud claimed the rise in food bank use was because there were more food banks and because the food was free.

And as for changes in welfare, the report notes that: “examining the impact of [welfare changes] on food bank use was not a specific part of its remit.”

Expedient – no?

There’s one other point that is central to the reports analysis.

The review warns ministers that while food banks and thousands of other voluntary food aid providers do an important job of coping with short-term hunger problems, government cannot rely on charity to tackle rising food insecurity.
“Increasing numbers of households are having to deal with changes in circumstances which are potentially having negative impact on their food security in the immediate – and possibly longer – term,” says the report.
It adds: “Some see it as appropriate for local groups to meet short-term food needs through temporary, non-governmental provision, but the evidence from international food security research suggests this is likely to be of limited effectiveness.
“A broader approach to sustaining food access, which takes account of longer-term and underlying dimensions to household food insecurity is needed.”

Of course this reliance on the voluntary and charity sector is of a piece with an ideological process of ‘rolling back’ state intervention. But the basic problem is that the state – as with so many areas – didn’t enter into such areas capriciously but did so because the voluntary, charity and private sectors are unable or unwilling to provide sustainable long term services.
Worth noting as well that the report was held back since last summer. That too is expedient.

Meanwhile, here’s Nick Clegg rushing to shore up the rickety looking edifice of the government’s orthodoxy…

Austerity and human rights II May 15, 2013

Posted by Tomboktu in Austerity, Human Rights, Social Policy.

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

Yesterday’s post was a report, with some analysis and views, on five cases that have been successful. Today’s is different: it is entirely speculative, but it might prompt action.

Two paragraphs in the Greek pension decisions contain important points. One reports the Greek government saying that it had to restrict the pensioners’ rights because of its obligations to the EU instituions and the IMF for the loans it was getting. The second quotes the ILO (referred to as the “High Level Mission” in the following paragraph):

[…] the Government indicated that data from ELSTAT showed that approximately 20 per cent of the population was facing the risk of poverty but that it did not have an opportunity, in meetings with the Troika, to discuss the impact of the social security reforms on the spread of poverty, particularly for persons of small means and the social security benefits to withstand any such trend. It also did not have the opportunity to discuss the impact that policies in the areas of taxation, wages and employment would have on the sustainability of the social security system.

The Greeek government is not alone, and the question is: can the troika — or key members of it — also be challenged legally. This post deals only with with the two European members of the troika: the ECB and the European Commission.

A legal challenge would need
(a) to identify the obligations that either of these bodies have that could be used in a legal challenge, and
(b) to identify how the legal challenge could be mounted — who has the right to take a case.

A number of legal obligations are potentially relevant. The key document here is the Lisbon Treaty. (An aside: after Lisbon, there are now essentially three fundamental legal documents governing the EU: (a) the Treaty on European Union (TEU); (b) the Treaty on the Functioning of the European Union (TFEU), and (c) the EU Charter of Fundamental Rights (EUCFR). They are available in a 408-page PDF here.)

The first obligation is set out in the TEU. The European Commission is required to “act within the limits of the powers conferred on it in the Treaties, and in conformity with the procedures, conditions and objectives set out in them” (Article 13(2) of the Treaty on European Union). It is that word “objectives” that provides the potential for action. Those objectives apply also to the ECB, so it is useful to summarise its obligations under Lisbon.

The basis for holding the ECB accountable is a little bit more convoluted, but gets to the same obligation. The ECB’s primary mandate under Lisbon is the objective of controlling inflation, and it has additional banking tasks concerning monetary policy, foreign exchange, etc. That mandate is set out in Article 127 of the Treaty on the Functioning of the European Union (emphasis added, original is on page no. C 83/102 of the PDF here) (thanks to Merijn Knibbe on the Real World Economics Review Blog for pointing this out):

Article 127
The primary objective of the European System of Central Banks (hereinafter referred to as ‘the ESCB’) shall be to maintain price stability. Without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Union with a view to contributing to the achievement of the objectives of the Union as laid down in Article 3 of the Treaty on European Union.

The point of the emphasis is that the ECB does indeed have a legal responsibility in relation to the objectives of the EU. The text on the ESCB points us to source of those objectives. The objectives set out in Article 3 cover both the neo-liberal economic free-market objectives and social objectives. Paragraph 3 of that Article contains the relevant text (page no. C 83/17), again with emphasis added:

3. The Union shall establish an internal market. It shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment. It shall promote scientific and technological advance.

It shall combat social exclusion and discrimination, and shall promote social justice and protection, equality between women and men, solidarity between generations and protection of the rights of the child.

It shall promote economic, social and territorial cohesion, and solidarity among Member States.

It shall respect its rich cultural and linguistic diversity, and shall ensure that Europe’s cultural heritage is safeguarded and enhanced.

The second source of potentially useful obligations of the ECB and the European Commission is the EU Charter of Fundamental Rights (it starts at page no. C 83/389 of the PDF here.)

The EUCFR has 54 articles, 50 of which set out human rights or principles. Since the right to social protection has already been the basis of a finding of a breach of human rights law in the Greek penioners’ cases, it would probably useful to use a similar basis for a legal challenge in the EU system. The relevant part of that article is as follows

Article 34
Social security and social assistance

1. The Union recognises and respects the entitlement to social security benefits and social services providing protection in cases such as maternity, illness, industrial accidents, dependency or old age, and in the case of loss of employment, in accordance with the rules laid down by Union law and national laws and practices.

It is important to acknowledge that the wording of Article 34 of the EUCFR is different from the wording of the related article, Article 12 of the Council of Europe’s European Social Charter, which was the basis of the Greek pensioners’ case against Greece. However, the explanations of the EUCFR (PDF here) make clear that Article 34 EUCFR does draw on Article 12 ESC. Here is the relevant part of Article 12 of the ESC:

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:

1 to establish or maintain a system of social security;

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 […].

Of course, the difference in the wording of the two legal texts could be a problem. The Greek pensioners’ case centred on paragraph 3 of the article they invoked: the requirement to progressively raise the system of social security to a higher level, which not found in the Article 34 EUCFR.  However, as noted in yesterday’s post, the European Committee of Social Rights described the reductions imposed on pensioners in strong language: “the adopted measures risk bringing about a large scale pauperisation of a significant segment of the population”. And the European Committee of Social Rights also noted that this has been observed by various international organisations, and the Committee pointed to findings by the ILO, the European Court of Human Rights, and Parliamentary Assembly of the Council of Europe. Given the serious nature of the cuts, the strong language of the European Committee of Social Rights, and the range of other bodies it has drawn on in reaching its legal findings, there must be a strong presumption that the situation is also a breach of the Article 34 of the EU’s Charter of Fundamental Rights, even if the exact point on raising the system of social security has not been transfered into the that EU Charter.

The final point to be made about the EU’s Charter of Fundamental Rights is that it applies to the European Commission and the ECB. The Charter makes that explicit:

Article 51
Field of application

1. The provisions of this Charter are addressed to the institutions, bodies, offices and agencies of the Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing Union law. They shall therefore respect the rights, observe the principles and promote the application thereof in accordance with their respective powers and respecting the limits of the powers of the Union as conferred on it in the Treaties.

However, the fact that the EU’s Charter of Fundamental Rights applies to two members of the troika in principle does not mean it necessarily applies in the specific circumstances of a particular situation. That will depend on examining the details of what exactly the two troika members have done, which is beyond the scope of this post.

I do not know if there is established EU case law on the when institutions are liable. Would the EU Court of Justice need to find that the two EU troika members directed that the particular cuts to Greek pensions be implemented before they would be liable to a finding of having breached either the Treaty on European Union or the EU Charter of Fundamental Rights (or both)? Or would the EU Court find that although the Greek government had choices about how it would reduce its spending to comply with troika conditions for support, the two EU members of the troika are none the less liable because they had a responsibility to ensure that the cuts they demanded are not implemented in a way that breaches the rights of Greek citizens?

I am sure that an argument would be made by the EU bodies that since social welfare is primarily the responsibility of the Member States, and since the EU’s powers are severely limited to tasks that “support and complement the activities of the Member States” (Article 153 of the TFEU; PDF here), then the EU institutions cannot be held liable for any breaches of human rights in those areas. And I cite the situation of Greek pensioners only because there is a set of five cases with a legal finding that humn rights have been breached. It may be the case that the situation of a Portugese, Spanish, Cypriot or Irish citizen or group of citizens might make a more useful legal case against the ECB or European Commission. However, my objective is not to present a fully polished case, but to suggest how one might be constructed.

The final point that needs to be addressed is how to get a case to the EU Court of Justice. There are two ways of doing this. One is that a domestic case is taken, and referred by a national court to the EU Court of Justice for a ruling on preliminary questions. I do not know how you would construct a case like that to try to get a ruling against the ECB or European Commission.

A more useful approach, I think, lies in the powers of the European Parliament. Article 263 of the Treaty on the Functioning of the European Union (TFEU) gives the European Parliament to bring action to have the acts of the European Commission and of the ECB reviewed for legality by the Court of Justice of the European Union. One of the bases on which the Parliament can legally challenge the ECB and European Commission are “infringement of the Treaties or of any rule of law relating to their application, or misuse of powers”. That power is constrained. There is a time limit of two months, which means the decisions that lead to the Greek penioners’ cases are well out of time. And a further point that would need to be examined is whether the specific actions by the ECB and the European Commission in their roles as members of the troika come within the term “acts […] of the Commission and of the European Central Bank”.

I may be missing some key legal rules, but based on what I have read, I would like to see the European Parliament examine how it can use its powers to bring a legal case to ensure that the two EU members of the troika are required to ensure their actions comply with EU human rights law. The ideal outcome would be a judgment that the Commission and ECB have breached EU law because of the effect of the cuts they have a role in imposing. But even second-best outcomes would be a significant step forward. For example, I noted yesterday that the European Committee of Social Rights, the less-well known sibling to the European Court of Human Rights, found that the lack of analysis of the impact of cuts on Greek pensions was a breach of human rights.

The task now is for MEPs to use the resources they have available to them — research staff, legal experts, etc. — to identify suitable case and initiate proceedings. A preliminary step could be for some MEPs to seek to have the Greek pension cases examined by a parliamentary committee with a view to determining if the facts and finding give rise to a need for the Parliament to examine the acts of the Commission and the ECB in light of their Treaty obligations and their obligations under the EU Charter of Fundamental Rights.

Austerity and human rights I May 14, 2013

Posted by Tomboktu in Austerity, Human Rights, Social Policy, Unions.

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.

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