There is a line in Ferdinand Mount’s book The New Few, on inequality, greed and the dual crises of politics and capitalism, where he remarks: “The trouble is that, on the whole politicians can only think about one thing at a time”. Here Mount refers to the focus in the 1980s and 1990s on the dire economic state of Britain but, he notes, in the process, “… other abiding imperatives were lost sight of [including]: the need to maintain the shape of our democratic institutions” that would protect Britain from the worst harms of the free market.
This insight from the man who headed Margaret Thatcher’s Policy Unit from 1982-84 captures the chief problem with much that defines the austerity measures in Europe’s ‘periphery’ countries today. However, the present circumstances offer a particular twist: while austerity measures in many European countries have led to the violation of social rights and widespread socio-economic malaise, for some countries decisions were informed by loan conditionality imposed at the behest of external institutions. The resulting harms point to an accountability gap across a range of international institutions that are, apparently, immune to legal responsibility when it comes to human rights. How has this gap at the heart of Europe come to pass? Greece is an informative case study.
Greece’s near financial collapse, its status as a eurozone country and the contagion that would affect other eurozone economies, led the European Union (EU) in 2010 to establish a temporary economic support mechanism to ‘save Greece’. The support mechanism provided consecutive loan agreements between the (new) Greek government and the so-called ‘Troika’, comprised of the European Commission (EC) on behalf of the EU, the European Central Bank (ECB), and the International Monetary Fund (IMF). This temporary financial assistance facility has since been replaced by the European Stability Mechanism (ESM), the permanent crisis resolution mechanism for the countries of the euro.[1]
The aim of the financial assistance was to redress imbalances in public finances, thereby reducing Greece’s external debt, and restoring Greece’s competitiveness. These measures, shaped by austerity economics, were meant to serve a higher good – the public interest – by preventing economic collapse and restoring the economy.
What occurred alongside the adjustments is widespread socio-economic alienation, including for the most socially and economically vulnerable in Greece. Support for Greece from the Troika has been conditional on reductions in public deficits and spending, drastic labour market reform and welfare state retrenchment. The impact of the measures on jobs, pay, conditions, and services has been extensive. UN human rights experts have highlighted grave concerns regarding the exercise of basic rights in the areas of social security, healthcare, the impact of privatization on access to essential services, as well as guarantees of equality between men and women across a range of labour rights.
The IMF itself concluded in its report on Greece of May 2013 that ‘the burden of adjustment was not shared evenly across society’. The ensuing human distress experienced within the country led to a series of complaints against Greece decided on by the Council of Europe’s European Committee of Social Rights, whose task it is to judge that State Parties comply with the provisions of the European Social Charter. Greece was found to have violated the right to social security due to its austerity measures.[2] In its defence, Greece argued that “…the modifications of the pensioners social protection … result from the Government’s other international obligations, namely those deriving from a financial support mechanism agreed upon by the Government together with the … ‘the Troika’ in 2010.”
The European Committee of Social Rights properly rejected this argument. But the point raises a number of important issues, including the perils of ignoring history and whether the international institutions in fact have human rights obligations of their own. That none of the international institutions implicated – the IMF, the EC, the ECB and notably the ESM – is bound by the European Social Charter (as it is open for ratification only by states) is not the end of the story.
There is a shameful history that tells of the negative impacts on socio-economic rights resulting from the interventions by the World Bank and IMF in the policies of developing countries from the 1980s onwards. Individuals were left to direct human rights claims to their enfeebled governments, the traditional state duty-bearers under the relevant human rights treaties. The international financial institutions, for their part, wearing their ‘non-state’ actor hats, were able to claim they possessed no legal obligations in the area of socio-economic rights.
It is not surprising to hear comparisons between the infamous period of structural adjustment in Africa and elsewhere a few decades ago, and austerity-driven conditionality in Europe today.
If the IMF and World Bank have remained beyond the reach of international human rights law one might assume a better outcome as regards the human rights obligations of EU institutions, like the EC and ECB, bound as they are under the EU Charter of Fundamental Rights (EU Charter) when implementing Union law.
But this has not been the case. The EU Charter provides for rights concerning fair and just working conditions, the entitlement to social security and social assistance, and access to health care, as well as the protection of human dignity and the right to life; all rights impacted by the austerity measures in Greece. The EU Charter also provides for equality between men and woman in all areas, including employment, work and pay. But the ESM was constituted as a separate international organization rather than an EU agency, and ESM Member States are not implementing Union law – thus the Charter would seem to bind neither of them. EU institutions should be bound by the EU Charter even when, technically, acting outside of the EU, but as it stands, the EC and ECB seem able to ignore the EU Charter in relation to their conduct under the ESM.
Europe’s elite failed to see the eurozone crisis, and the responses to it not only as a financial and economic issue, but also a human one. They failed to acknowledge that stabilizing economies through austerity measures at best secures socio-economic rights only indirectly and tenuously and, at worst, violates them egregiously. Decades of experience from elsewhere in the world on the human costs of structural adjustment should inform current decision-making, as should the experience of the impunity with which international organizations function when it comes to the harm to human rights caused by their policies. The people of Greece were treated as if ‘politicians can only think about one thing at a time’, and with grave results.
[1] While the European Financial Stabilization Mechanism (EFSF) will remain active in financing the ongoing programmes for Portugal, Ireland and Greece, as of 1 July 2013 the EFSF may no longer engage in new financing programmes or enter into new loan facility agreements and as of 1 July 2013 the activities of the EFSF are carried out by the ESM staff.
[2] The complaint is part of a series of collective complaints concerning the same facts, registered as Nos. 76/2012 to 80/2012 and on which the European Social Rights Committee provided the same assessment and rendered the same decision.
Photo credit: Wikipedia/Philly boy92
