Of Austerity, Human Rights and International Institutions

• DOI: http://doi.org/10.1111/eulj.12138
• Date: 01 July 2015
• Published date: 01 July 2015

Of Austerity, Human Rights and

International Institutions

Margot E. Salomon*

Abstract Austerity measures have led to the denial of social rights and widespread

socio-economic malaise across Europe. In the case of countries subjected to

conditionality imposed by international institutions, the resultant harms have highlighted

a range of responsibility gaps. Two legal developments come together to expose these

gaps: Greece’s argument in a series of cases under the European Social Charter that it

was not responsible for the impact on rights brought about by austerity measures as it

was only giving effect to its other international obligations as agreed with the Troika;

and the concern to emerge from the Pringle case before the European Court of Justice

that European Union (EU) institutions could do outside of the EU what they could not

do within the EU --disregard the Charter of Fundamental Rights. That the Commission

and the European Central Bank were in time answerable to international organisations

set up to provide f‌inancial support adds an additional layer of responsibility to consider.

Taking Greece as a case study, this article addresses the imperative of having interna-

tional institutions respect human rights.

I Introduction

The 2008 global f‌inancial and economic crisis rolled out across the world revealing

systemic f‌laws in national and international monetary and f‌inancial architecture. It

was accompanied by massive social harms that have by now been well documented,

although far from resolved.1The impacts of the crisis have affected countries in all

* Law Department and Centre for the Study of Human Rights, London School of Economics. Ideas for

this article were presented at the Sovereign Debt and Fundamental Rights Conference, The Economic

Crisis, International Institutions and Human Rights Panel, International Association of Constitutional

Law, Athens, June 2013, and in a lecture on Socio-Economic Rights and Austerity: Institutional,

Normative and Methodological Tensions delivered at the Workshop on Comparative Analysis in

Human Rights Research, European University Institute, June 2013. I thank participants from both

events for their ref‌lections, Lorand Bartels, Bruno de Witte, and the editor and anonymous reviewers for

their helpful comments on a draft of this text, and Louis Karaolis for his excellent research assistance.

As ever, responsibility for the views presented herein rests solely with the author.

1‘The f‌inancial crisis, which began in the United States, then spread to Europe, has now become global

. . . It is important to recognize that what began as a crisis in the f‌inancial sector has now become an

economic crisis. But, it is not only an economic crisis, it is also a social crisis’. Report of Commission of

Experts of the President of the General Assembly on Reforms of the International Monetary and Financial

Systems (Stiglitz Report) (21 September 2009) 12; see further ILO’s Global Employment Trends 2014;

Risks of Jobless Recovery (International Labour Organization, 21 January 2014).

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European Law Journal, Vol. 21, No. 4, July 2015, pp. 521–545.

© 2015 John Wiley & Sons Ltd., 9600 Garsington Road, Oxford, OX4 2DQ, UK

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regions of the world, but for a variety of reasons certain countries weathered the

upheaval of their economies better than others.2While economists take different views

on what the best course of action is under conditions of recession, from 2010 the

advocates of austerity were most inf‌luential in determining the measures taken as a

response to economic diff‌iculties as seen, for example, in the United States and the

United Kingdom, as well as in the eurozone countries of Portugal, Spain, Greece and

Italy. In the developing world, the International Labour Organization (ILO) reports

of ‘pre-emptive’ austerity measures having been taken.3Austerity as a response to

recession has been widely criticised by economists, a point to which we return at the

end of the paper. Austerity measures have also had devastating effects on the exercise

of human rights in Europe, including notably social rights.

Using Greece as a case study, this paper advances two central arguments: f‌irst, that

the governance of the crises in the European Union has led to massive violations of

human rights; and second, that the way in which the crises have been governed has

exposed a series of black holes when it comes to accountability for the violation of

human rights. The way the crises have been governed challenges not only the sub-

stantive content of human rights law constitutionally, supranationally and interna-

tionally, but notably the very idea that there should be a clear line of responsibility

when it comes to the protection of human rights. The legal implications of this can be

illustrated by reference to the litigation before the Council of Europe’s European

Committee of Social Rights regarding the violations of social rights in Greece. The

conditionality imposed on Greece by the European Commission (Commission or EC),

the European Central Bank (ECB), and the International Monetary Fund (IMF)—

the so-called Troika—for receipt of loans challenges conventional wisdom as to the

role and capacity of the state. The disregard not only of substantive rights protection

but of the very idea of state responsibility—of the state as the institution through

which rights are protected and of the state as the entity that is liable for a failure to

perform its human rights duties—is a key story to emerge from the response to the

crisis in Greece. The extraterritorial obligations of eurozone states to the people of

Greece are another story to emerge from the austerity crisis. And at the pinnacle of

this account sits the absence of international legal responsibility of international

institutions, including the EC, the ECB, the European Stability Mechanism (ESM)

and the IMF—so deeply implicated in the human rights harms that have come to pass

in the name of saving Greece.

This article proceeds as follows: Part II provides an overview of the initial f‌inancial

assistance mechanisms put in place for Greece, and the concerns and impact of

2Krugman citing the work of Belgian economist Paul DeGrauwe suggests in general that ‘the crucial

difference . . . seemed to be whether countries had their own currencies. Such countries can’t run out of

money because they can print it if needed, and absent the risk of a cash squeeze, advanced nations are

evidently able to carry quite high levels of debt without crisis’. P. Krugman, ‘How the Case for Austerity

Has Crumbled’, (6 June 2013) LX(10), New York Review of Books 67, at 72. As for developing countries,

the Stiglitz Report remarks: ‘While developed countries have the f‌iscal f‌lexibility to respond, to stimu-

late their economies, to shore up failing f‌inancial institutions, to provide credit, and to strengthen social

protections, most developing countries have tighter budget constraints, and resources directed towards

offsetting the impact of the crisis must be diverted from development purposes’. Report of Commission

of Experts of the President of the General, supra n 1, 13. Greece, the subject of this article, seems to have

suffered from both sets of constraints, a point addressed subsequently herein.

3ILO, World of Work Report 2012: Better Jobs for a Better Economy (ILO/International Institute for

Labour Studies, 2012) viii.

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