Europe’s Debt to Greece

Written by

The past five years have shown a categorical disregard for the human rights of the people of Greece by international creditors. We have witnessed a disregard by states, including notably eurozone states, as well as by European institutions and the IMF, of their human rights obligations when crafting conditionalities. There is a long list of deplorable developments that this European catastrophe has exposed (the catastrophe is Europe’s even if the resulting harms at this point impact Greece) including coercion in the negotiation and conclusion of agreements, ongoing attempts at regime change, and the hollowing out of national democracy (among other examples, the statement of the Euro Summit of 12 July requires Greece ‘to consult and agree with the Institutions on all draft legislation in relevant areas … before submitting it … to Parliament ’). There are many other indefensible developments, including the enactment of extreme neoliberal policies relentlessly challenged by economists on their own terms, for taking the wrong approach to promoting growth and investment. Under the conditionalities set out in the Memorandum of Understanding (MoU) of 11 August 2015 for receipt of the third bailout, court rulings that may require the reversal of spending cuts – for example where social rights violations are found – are framed as ‘fiscal risks’, and the MoU requires a commitment from the Greek government ‘to take offsetting measures as needed to meet the fiscal targets’. Greece has suffered years of recession under the Troika’s austerity plans of 2010 and 2012 accompanied by widespread social malaise. In this new phase, we are also seeing all branches of government that might interfere with the creditors plans rendered ineffectual in breach of the most fundamental requirements of democracy and the rule of law.

In the past five years – the Troika years – Greece has seen budget cuts that have been followed by a 200% rise in the incidence of HIV/AIDS, the return of mother-to-child transmission of HIV (health cuts have meant routine screens are no longer conducted on pregnant women), the return of malaria, drastic labour market reforms, a rise in unemployment, especially among the young and women, and violations of the right to social security. Even an IMF Research Paper of 2013  challenged austerity in finding that ‘fiscal consolidation [austerity] typically raises income inequality, raises long-term unemployment and lowers the share of wage income’. It is thus deeply disingenuous to see in the latest MoU the statement that ‘The economic crisis has had an unprecedented impact on social welfare’. It is the response to the economic crisis that has crushed the people of Greece and brought the new government – elected on an anti-austerity platform – to its knees. What we are seeing is a total disregard for the political rights of the people of Greece not to mention their right to any reasonable form of economic self-determination.

For today I put many of these issues aside to focus on one matter in particular: the failures of the international creditors to undertake human rights impact assessments in the area of socio-economic rights.

In my own work  on the subject of austerity and human rights and in the legal brief I wrote recently with Olivier De Schutter for the Special Committee of the Hellenic Parliament on the Audit of the Greek Debt from which a good amount of the summary below is drawn, I was struck by the fact that the actors involved in the negotiation and implementation of the 2010 and 2012 MoUs acted in total disregard of international human rights and that they had not even taken the elementary precaution of assessing the potential impacts on the level of enjoyment of human rights of the measures they were recommending or that they adopted. The Guiding Principles on Foreign Debt and Human Rights, endorsed by the UN Human Rights Council in 2012, require that ‘Lenders should not finance activities or projects that violate, or would foreseeably violate, human rights in the Borrower States. To avoid this eventuality, it is incumbent upon lenders intending to finance specific activities or projects in Borrower States to conduct a credible Human Rights Impact Assessment as a prerequisite to providing a new loan.’ [para. 40] The Guiding Principles on Extreme Poverty and Human Rights, which were adopted by consensus by the Human Rights Council in 2012, also require human rights impact assessment, including where conduct would create a foreseeable risk of impairing the enjoyment of human rights by persons living in poverty beyond the borders of a state. [para. 92] Human rights due diligence, so central to the Guiding Principles on Business and Human Rights adopted by consensus by the Human Rights Council in 2011, is meant precisely to identify and assess the nature of the actual and potential adverse human rights impacts in order to avoid harms (in the context of these Principles harms with which a business enterprise may be involved). In the Pulp Mills case, the ICJ concluded that there is a requirement under general international law for states to undertake environmental impact assessment where there is a risk that the activity may have a significant adverse impact in a transboundary context. It would be difficult to defend the idea that there is an obligation to prevent transnational environmental harms but not transnational human harms. The key point for current purposes is that due diligence, and the duty of vigilance and prevention of human rights harms it implies, impose an obligation on states and other actors acting internationally.

Duties to assess human rights impacts apply both to the creditors – the Euro Area Member States, the IMF and now the ESM – and to Greece itself. The European Social Rights Committee, in Pensioners’ Union of the Agricultural Bank of Greece (ATE) v Greece, (Complaint No. 80/2012 16 Jan. 2012) expressed its surprise at the fact that the (former) Greek government failed to undertake even a minimum assessment of the impact of measures on vulnerable groups for which it has been held internationally responsible. In its recent review of Greece, the UN Committee on the Elimination of Discrimination Against Women provided the following recommendation as a response to the crisis:

“Due to the seriousness of the situation and lack of any gender-sensitive approach to the current crisis policy within the State party, the Committee recommends that all important policymakers in Greece, including the European Union institutions and the IMF, cooperate in setting up an observatory to fully evaluate the impact on women of the many measures taken during the economic and financial crisis. Furthermore, a comprehensive gender equality policy should be developed in order to respond to the crisis and make sure that the obligations under the Convention and the aim and spirit of the Treaty of the functioning of the European Union, which requires that in “all its activities the Union shall aim to eliminate inequalities, and to promote equality, between men and women”, can be fully implemented by the State party.” [para. 40]

The failures by Greece and the Euro Area Member States (as well as by the European Commission, European Central Bank, and the Council of the EU when it imposed on Greece deficit reduction measures) to conduct appropriate human rights impact assessments were not compensated for by the IMF during the 2010-2015 period. Quite to the contrary, the IMF – by its own admission – does not consistently conduct prior social impact assessment, despite the potentially regressive impacts of the measures adopted in order to comply with IMF conditionalities: between 2006 and 2010, nine of the 18 countries in an IMF case study sample [see para. 26] were subject to programme conditionality affecting the prices of products consumed by the poor. It is also worth noting that the ‘specific’ terms and requirements provided for in the Memoranda with Greece of 2010 and 2012 which are categorical on the extent of Troika oversight and explicit in their substantive prescriptions come after ‘prior action’ policy, that is measures that a country agrees to take before the IMF’s Executive Board approves financing or completes a review. The approach by all creditors to the third bailout has followed this same familiar model.

As for the EU, the implication of the applicability of both the EU Charter of Fundamental Rights and international human rights law to the acts of the EU is that that the European Union and its institutions should strengthen their assessment of impacts on fundamental rights of the legislation or policies that relate to the Economic Monetary Union, in particular as regards the recommendations addressed to countries under financial assistance. Despite commitments by the European Commission to fundamental rights impact assessment and the development of methodologies to those ends over the past years, impact assessment has been absent from the crafting of the series of conditionalities imposed on Greece.

It is hardly surprising that, in the absence of such impact assessments, the human rights duties of the parties concerned tend to be disregarded in the name of macroeconomic adjustment. A study on austerity in the EU Member States prepared for the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs (LIBE Committee) concluded that:

“… it rarely appeared that the spending cuts introduced during the crisis were specifically targeted at the wasteful uses of public resources. Rather, it seems that many of the imposed measures were horizontal, indiscriminate cuts across the policy areas they targeted, in order to meet financial savings that were determined in advance. [I]n Greece, in order to meet the goal of reducing the number of public employees by a certain number, the entire structure of the national broadcaster was abolished. Spending cuts should not be horizontal – they should be based on detailed evaluation of the effectiveness, efficiency, relevance and added value of public expenditure, and should include a public consultation.” [p. 165]

A 2014 enquiry by the European Parliament on the role and operations of the Troika with regard to the euro area programme countries concluded that ‘too little attention has been paid to alleviating the negative economic and social impact of adjustment strategies in the programme countries’. The Report ‘deplores the fact that too often the one-size-fits-all approach to crisis management has not fully considered the balance in the economic and social impact of the prescribed policy measures’. [para. 45] Panagiotis Roumeliotis, Greece’s former alternate Executive Director at the IMF from 2010-2011, was asked in June 2015 at a hearing of the Special Committee of the Hellenic Parliament on the Audit of the Greek Debt [notes on file with author] about the veracity of a written statement he delivered to the IMF on 9 May 2010 in which he claimed that: ‘The program [for Greece under the Standby Arrangement/MoU] includes measures to protect the most vulnerable segments of the population. My authorities are committed to an equitable and fair distribution of the adjustment burden. The tax burden for the rich will increase, while the minimum pension and family allowances will be preserved’. In his testimony he offered an altogether different account:

“I did not see measures to protect those groups, on the contrary they saw cuts. No one said the minimum wage should not be reduced, and it was. To say we will protect the most vulnerable groups is theoretical. Instead they suffered the most. The results were an increase in unemployment, an increase in poverty; we did not work on protecting the vulnerable social groups and what we saw was their further marginalization. Yes, there was a general reference in the first MoU [to protecting the most vulnerable] but [in the IMF meetings] they go measure by measure and discuss, for example, how to reach the target deficit, the primary surplus etc. There is no discussion on vulnerable social groups.”

The MoU for the third bailout offers a nod to ‘social justice and fairness’ and a reference to what may be Prime Minister Tsipras’ only win in the protracted ‘negotiations’, ‘a basic social safety net in the form of a Guaranteed Minimum Income (GMI)’ (in his commentary on the MoU, former Finance Minister Varoufakis remarks that the Troika’s GMI will merely take from one poor Greek family to give to another). But there is little in the MoU to suggest that the scheme is meant to serve the interests of humans. The Euro Area Member States, EU institutions, IMF, and IMF Member States, have all failed to meet the most basic of requirements to prevent human rights harms in the policies they pursued and the ESM (and ESM Member States i.e. eurozone states) are on the same track with this new MoU. There was, and it seems there still is, no intention to undertake the ex ante and ex post impact assessment that forms a basic expectation of international human rights law and EU law and policy, including guarantees of consultation by persons likely to be affected by the policies and access to information and transparency regarding public access to the results of assessments.

As an aside, the references in the MoU of 2015 to ‘oversight and transparency of reporting standards’ as part of the controversial €50 billion privatisation Fund, that, in line with the statement of the Euro Summit of 12 July 2015, ‘will be established and have in its possession valuable Greek Assets’ and will be supervised by the relevant European institutions [p. 25], fail as an exercise in procedural whitewashing of the main aim which is the selling off of Greece. In a recent piece, Etienne Balibar, Sandro Mezzadra and Frieder Otto Wolf drew attention to the planned alternative to Grexit – the reduction of Greece to a neoliberal protectorate (Lafazanis prefers ‘neo-colony’) and the expropriation of its national resources.

States and international organisations have willingly failed to see the eurozone crisis, and the responses to it, not only as a financial and economic issue but also as a human one. They failed effectively to acknowledge that stabilising economies through austerity measures at best secures socio-economic rights only indirectly and tenuously and, at worst, violates them egregiously. It is hard to fathom how decades of experience from elsewhere in the world on the human costs of structural adjustment failed to inform decision-making in Europe, while over half a century of standard-setting in the area of socio-economic rights regionally and internationally went virtually unnoticed. I hope, indeed predict, that the near future will see harnessed every legal and political opportunity to reclaim, reconstruct and redress this grave affront to justice and the deeply misguided view of who it is the economy is meant to serve. Europe is indebted to the people of Greece and to every European in whose name this travesty is being executed.

At the hearing in Athens in June, Panagiotis Roumeliotis, Greece’s former alternate Executive Director at the IMF, was also asked whether during the exchanges on the MoU he or the Executive Director raised at any point in time the fact that Greece had human rights obligations that had to be taken into account in the negotiation of the conditionality, including regarding the right to social security, labour rights and the rights of women. Mr Roumeliotis looked into the TV camera, to the besieged people of Greece, and said:

“Unfortunately during the IMF discussions we don’t raise human rights. We [Member States] never refer to them. Such issues – while I was serving at the IMF – were never raised. We never have such discussions. Reform would be good.”

Print Friendly, PDF & Email

Categories

  • Economic Social Cultural Rights
  • EJIL Analysis
  • European Union
  • Extraterritorial Application
  • Financial Crisis
  • Human Rights

    • Tags

  • Greek Debt

    • Leave a Comment

    Comments for this post are closed

    Comments

    Jakob Cornides says

    August 24, 2015

    The publication of a piece like this on the EJIL blog might be seen as a gross misjudgement of the editorial board, given that it really looks like political campaigning rather than a sound legal argument. On the other hand, I think it has at least the merit of exposing the ideology and mindset of many of those who nowadays hold themselves out as “experts” in international human rights law.
    Let me say one thing right at the beginning: I do not disagree with Mrs. Salomon’s assessment of the newest bailout package. That package not only humiliates Greece as an independent and sovereign nation, but it is also – as will soon be discovered -completely inept to resolve Greece’s debt problem: next year a new package will be needed. Also, I think the true challenge is not to find a way for Greece to repay her debt – this is simply impossible, which is why ultimately a haircut seems unavoidable, whatever form it will take and however it will be called.
    But the real challenge is a different one. It consists in transforming Greece into a viable national economy, i.e. into a country that is durably sustained by its own revenues rather than by transfers financed by other countries’ taxpayers.
    Where does Greece’s debt come from? It comes from the fact that, thanks to the Euro and the low interest rates associated with it, the entire country has for twenty years or so lived far above its standards. And what is Greece’s problem? It is that the country is simply not competitive, because THE WAGES ARE TOO HIGH IN RELATION TO THE COUNTRY’S PRODUCTIVITY. As long as this remains to be the case, no reasonable investor will ever create any jobs in Greece, because it simply is a bad bargain (both in comparison to Germany, the Netherlands, and Austria, where labour is more expensive but at the same time more productive, and with the Baltic States, Romania, or Bulgaria, where productivity may be as low as in Greece, but wages are lower.
    Other strategies are unlikely to work out. The idea of selling the country’s assets (such as ports, airports, the state railway, etc.) for 50 billion Euro is simply ridiculous – not because this would be inhumane, but because it is unrealistic. It is hardly likely that those assets could be sold for more than 20 billion, if at all…
    In other words, the only way out of this dilemma in the short term is to radically reduce wages and cut back social benefits. But this will affect the population precisely in the way criticised by Mrs. Salomon. As it appears, every loss of income, welfare entitlements, and social status, is, in Mrs. Salomon’s world, a “human rights violation”. Indeed, if I have not completely misunderstood the piece, it would appear that Greece and its citizen have an unconditional human right to receive bailouts and similar transfers from other countries, including countries where the average living standard is far lower than in Greece. Greece is not responsible for Greece, but everyone else is.
    It should not be forgotten in this context that what Mrs. Salomon calls “the international creditors” are in fact political institutions that represent the interests of their membership. The Eurozone membership comprises countries such as Slovakia and the Baltic countries, where incomes and living standards are lower than in Greece. The IMF’s membership includes not only wealthy industrialized countries, but even many developing countries such as Bolivia, Chad, Cambodia, or the Congo. How can it be explained to the inhabitants of these countries that Greece cannot be expected to suffer any reduction in its living standards?
    In short, Mrs. Salomon’s piece is a perfect example to evidence the hollowness, and indeed the absurdity, of much of today’s “human rights” rhetoric. And the fact that much of that rhetoric emanates from the UN does not lend it authority, but just increases the absurdity. The technique is quite simple: it is called the “rights based approach”. Pompous statements are adopted that people have unconditional and inalienable “rights” to X, Y, and Z, but nobody seems to have wasted any thought on where X, Y, and Z, are going to come from. Once adopted, these rights entitlements are given the broadest possible interpretation, resulting in the notion that every loss of living standard, and every cut in social welfare, are “serious human rights violations”.
    But rights do not come without responsibilities. It is true that a state cannot arbitrarily define its own purposes, but is sub-servient to the common good. Health, employment, etc. are rights in the sense that every government is obliged to develop policies that are conducive to health, social security, employment, etc. But in the Greek case, it was a long series of Greek governments that have failed in providing this, not the government of Germany, Botswana, or any other country.
    Let’s stack away this eternal myth of Greek victimhood, as well as the UN’s “rights based approach”. Let’s just be realistic: Greece wants around 100 billion Euro, or more, from other countries’ taxpayers. Why should anyone be surprised that that money comes with strings and conditions?

    Jeremy Rowlands says

    August 25, 2015

    Mr Cornides - you have singularly failed to engage with any of Dr Salomon's analysis. Your response is little more than a series of false representations, non-sequiturs and condescension.

    Rodrigo Bastos Raposo says

    August 25, 2015

    Mr. Cornides brought some sense to the discussion. Although there's a widespread feeling of solidarity towards Greece and its recent troubles, this must not elude that a serious adjustment is in order to bring the country's economy back in track.
    This adjustment will mean more austerity, not only now, but in the years to come. It might be necessary, also, the enactment of legislation that makes mandatory some kind of equilibrium between tax revenues and government expenses. I realize that must be kind of fun saying that legislation is needed to enforce what is perceived as common sense, but sometimes common sense is not the same to everyone.
    As for the creditors, there are also bad news, as they will have to recognize, sooner or later, that the greek bonds do not value as much as they would like.
    Here in Brazil we faced a huge fiscal adjustment in the nineties wich, despite all the "neoliberal" kind of criticism, made for a stable currency, monetary inflation control and brought back foreign investors. Unfortunately, during the last two decades the country experienced a continuous rise in government expenditure. And not as a result of the expansion of energy and transportation infrastructures, but mostly coming from the development of a social welfare net.
    Social entitlements are nice and they are the kind of thing that surely carry votes to a political party, although they must be erected in the long run, following economic growth, and not before it.
    Leftists politicians in Greece and Brazil must stop complaining about the threat to human rights that creditors represent and face the challenge to really build social welfare in the long run. And it comes only with responsible fiscal management.

    Margot Salomon says

    August 25, 2015

    As the opening line of the comment by Cornides suggests, his entry is not meant to engage in any meaningful substantive academic discussion but to impose administrative censorship on this blog. He continues by dismissing my contribution simply on the basis of my real or assumed association with some group, in this case human rights law experts. Not surprisingly, he then misrepresents what I wrote: my carefully crafted piece uses the word ‘violation’ only where there has been an authoritative finding by an international body to that effect. Let me express the hope that his defensive tone does not imply that he would speak for his colleagues at the European Commission.

    Matthias says

    August 26, 2015

    Professor Salomon, thank you very much for your post, and for the wealth of information you shared with us. I find it somewhat sad that the discussion of the Greek situation and of the EU financial crisis more generally on this blog has been quite muted, particularly of late. I can understand that the subject is complex, and the politics of it are quite explicit, two circumstances which might discourage some jurists from getting involved. But it can't be that international legal scholars have so little to say about this subject. So thank you again for raising the issue here.

    Miroslav Baros says

    August 26, 2015

    Thank you very much Professor Salomon for your highly relevant, timely and invigorating analysis. I also totally agree with your incisive assessment of the situation; it was permeated by an astonishing and systematic disregard of human rights obligations towards the Greek people. And it is, unfortunately, not the first time that the international financial institutions have played such a role; for example the IMF was an active player by its conditionality programme during the outset of the Yugoslav crisis; and it continues to impose unrealistic political conditions on a number of states.
    I have to make the following observation in relation to Mr Cornides's argument. (I ask for readers' patience here as my observation is not strictly relevant to the legal context of the episode; I am making it for the sake of a factual presentation of the chronology of the events and to respond to the astonishingly inaccurate and nonchalant claim.)
    Mr Cornides asks, or rather states in a somewhat matter of fact style: "Where does Greece’s debt come from? It comes from the fact that…., the entire country has for twenty years or so lived far above its standards. And what is Greece’s problem? It is that the country is simply not competitive, because THE WAGES ARE TOO HIGH IN RELATION TO THE COUNTRY’S PRODUCTIVITY". Wow! (and I put my expression of shock in lowercase). Why am I shocked? Because tabloids provide more analytical and maybe even more palatable accounts for those who want to believe in a particular narrative regarding the origin of the Greek economic tragedy, which is rather surprising considering the expertise and experience of the author. Mr Cornides refers to a lack of relevance of Salomon's legal analysis, however he does not offer any refinement; instead, he not only gives us, in my view, a gross misinterpretation of what happened in Greece, but also makes a worrying disturbing claim, which merits a response. And yes, thanks for drawing readers' attention to the difference between a political campaign and a sound legal argument. If you are exposing a human rights violation, you are not making a sound legal argument! Nice one. I hope the author, especially taking into account his prominence and official engagement, does not really believe all he said in his piece and that the argument does not in any way prejudice or represent the views of other members of the European Commission, because if it does, I will for the first time be very much looking forward to the promised referendum on UK membership in the EU!
    I was talking to a group of friends the other day; some lawyers, some economists, and Greece inevitably came up as a topic. In everybody's mind, the same question was lingering: what really happened to Greece? What was said (mainly by my economist friends) was presented as a well-known fact! But the ease with which Mr Cornides is offering his version of the Greek tragedy led me to conclude that the real reason is not actually so obvious; maybe Mr Cornides relied on his perception that people don't understand what really happened to Greece? So, I will briefly present the genesis of the crisis, although, from a human rights point of view as indicated above, this is not actually necessary because I am rejecting as a matter of principle a harmful and dangerous implication that Greeks brought this catastrophe on themselves as the author explicitly suggests.
    The tabloids' narrative referred to above is well-known: Generous banks gave too much money to the Greek government, who spent it unreasonably, irresponsibly etc. But the truth is very far from this gross oversimplification: Greece was actually pushed into unsustainable debt by criminal activity of the banks and this is how it happened:
    The “Great Financial Crisis” of 2008 was itself initiated by Wall Street and international bankers after they decided that the business of giving subprime mortgages was not sustainable. Because of this, they clandestinely sold them as “mortgage-backed securities” for a huge profit to various financial entities in countries around the world. For the sake of comparison, imagine a scenario: "I lend you some money knowing that you cannot return it; then I sell your debt (my financial claim against you) to somebody else. The Greek banks were among those who bought these new financial products.
    How was this huge scam possible one may wonder? Well, the bankers needed another branch of the banking system, and they found it in S&P, Fitch and Moody, who were effectively employed to help this criminal activity. The agencies gave stellar ratings to those sold financial products. Using my comparison above, that would be equivalent to me finding an influential friend who reassures the new debtor that the debt sold to them is returnable with a huge rate of interest. Of course, in reality those new financial products were doomed to failure. As a result of this scam, commercial and investment banks around the world started collapsing and governments' assets disappeared because nobody, apart from the bankers, knew what was going to happen to those securities. The bankers then demanded a bailout from the citizens of the doomed countries whose banks had bought those "financial products"; in Greece the banks received more than £20 billion from the Greek people, So much for "THE WAGES ARE TOO HIGH IN RELATION TO THE COUNTRY’S PRODUCTIVITY" claim.
    This unscrupulous drive for profit by the bankers forced the Greek government to accept huge debts; hand-in-hand with this was the downgrading of the country's bonds, which resulted in even more expensive borrowing, further ruthless privatisation, selling revenue generating assets etc; that is what happened to Greece and to other nations whose citizens already suffer human rights violations due to austerity: Italy, Portugal, Spain.
    Let me summarise this chronology: You own me some money; I know you can't return it; I sell my financial claim against you to somebody else assuring the new debtor that the debt will be repaid; the new debtor invests it further (like pensions or other assets) believing in my reassurance and then by the time the debtor realises they bought an exploding financial bomb it's too late; the government will bail me out through the citizens. Does this make sense?
    To inject a bit more legal context, the whole episode provides a textbook case for analysing the relationship between globalisation and human rights. It was always obvious that there was a worrying tension between the two. At the very outset of the so-called financial crisis, the UN warned that the liberalisation of the economy posed a threat to human rights: “Globalisation should be guided by the fundamental principles that underpin the corpus of human rights” (UNGA Resolution 62/151, March, 2008). Governments are the main protectors of human rights; they are either incapable or unwilling to protect the basic human rights of individuals under their jurisdiction. For example, hundreds of people are dying in Greece as a result of a lack of basic medical care and drugs; to me this kind of suffering seems to engage arts. 2 and 3 ECHR-related concerns; that is the real challenge or issue that Mr Cornides should be talking about. Demanding "radical reduction of wages and cutting social benefits" (the Troika went even further by asking the Greek government to sack cleaning ladies!) looks pretty grotesque.
    In the light of the above, I personally find disturbing the proposition that human rights constitute "hollow rhetoric, which emanating from the UN does not lend it authority, but just increases the absurdity".

    Jakob Cornides says

    August 26, 2015

    I am immensely grateful to Mr. Baros for his brilliant analysis of the origins of the Greek debt crisis. Having read it, I now feel quite naïve and stupid. (Ich merk es schon: ich war ein Tor – nun komm ich mir recht schal und albern vor…)
    Of course, the correct explanation for the current calamity has nothing to do with anything Greece has ever done or failed to do – neither with low productivity, nor with high wages, nor with the way in which Greece managed to become a member of the Eurozone.

    Instead, the country is the victim of some sinister Wall Street banksters who fraudulently sold “mortgage-backed securities” to Greek banks. And of course the managers of those could not be expected to understand what they were buying. And somehow the Wall Street banksters had singled out Greece (more than any other country) to be the victims of their fraudulent operations – how else is it to be explained that Greece (and no other country) is in such a singularly bad situation?
    It all smacks of an international ploy against Greece, which by definition must be a serious human rights violation. And, therefore, it quite obviously is unnormal and unacceptable that the Greek taxpayer should have to bail out those (unfortunate, but in fact well-managed) banks, whereas it is perfectly normal and acceptable that Slovak or Baltic taxpayers should bail out Greece.
    Thanks for enlightening me.

    Margot Salomon says

    August 27, 2015

    An addition to Miroslav Baros’ lucid chronology: It is now common knowledge that prior to the first Greek ‘bailout’ in 2010 the IMF amended its articles of agreement (via the support of the Europeans) to allow for lending to a country with unsustainable debt. IMF Member States knew that the money was not to rescue Greece but to rescue German, French and Greek banks and a number of (non-European) IMF Executive Directors spoke out against it at the time. Debt restructuring was rejected by Germany and France and 90% of that so-called bailout package went to German, French and Greek banks not to the Greek state (or its people). The loan came from the IMF and the pooled bilateral loans of Eurozone states. In this way, private debt was converted to public debt paid by the taxpayers of Eurozone countries. Under that bail-in, combined with austerity which shrunk the economy (and which no reasonable economist supported then or supports now in the case of Greece), Greek debt skyrocketed, as was predicted it would.

    That said, perhaps the most important point for today is this: as a matter of international human rights law it is not directly relevant whether Greece brought the situation on itself or not.

    Tara Van Ho says

    August 27, 2015

    Mr. Cornides, I believe you have, in fact, "completely misunderstood" Margot's post. I think your objections principally come down to one line in your comment: "As it appears, every loss of income, welfare entitlements, and social status, is, in Mrs. Salomon’s world, a “human rights violation”.

    That is not what I see in Margot's critique. I think she makes it clear that while the impacts are worrying, the more problematic legal issue is that states failed to account for these impacts in the decision-making process. The impacts point to the issues that needed to be assessed. Margot is clearly arguing that procedural standards were not met and as a consequence states failed to meet their international human rights law obligations.

    You might benefit, Mr. Cornides, from reviewing what the Committee on Economic, Social and Cultural Rights has said on the issue of how budgetary decisions should be considered judicially (unless you are intent on also dismissing them as experts). The outcomes are relevant, but according to the Committee:

    "In its assessment of whether a State party has taken reasonable steps to the maximum of its available resources to achieve progressively the realization of the provisions of the Covenant, the Committee places great importance on transparent and participative decision-making processes at the national level. ... To this end, and in accordance with the practice of judicial and other quasi-judicial human rights treaty bodies, the Committee always respects the margin of appreciation of States to take steps and adopt measures most suited to their specific circumstances." (UN Doc. E/C.12/2007/1, para 11).

    States may come to a variety of budgetary decisions that impact human rights to varying degrees, but when making those decisions they are legally obligated to consider, amongst other issues, their human rights obligations. When considering that obligation, it becomes difficult (impossible) to defend the *process* of decision making at issue in the Greek restructuring. That was the substance of Margot's point, and it is unquestionably a legal, not political, critique.

    Moreover, might I suggest that there is a way to disagree without being so disagreeable? I don't always agree with Margot's legal analysis, but to suggest she's not a legal expert, particularly on these issues, is well out of line.

    Margot, as always, thank you for an interesting read.

    Marko Milanovic says

    August 27, 2015

    Many thanks to everyone for their comments. May I please however remind all commenters to maintain a civil, constructive and reasonable tone in the discussion. In that regard please note that an anonymous comment which fell afoul of those requirements has been deleted.

    Alex Gkousis says

    August 27, 2015

    Mr. Cornides begins his initial post by stating somewhat presumptuously that too many people unjustifiably call themselves international human rights law experts nowadays and, subsequently, he notes that the scope of the relevant human rights is broadened vaguely (totally faulty statement but that is not even the problem here) and that this should not be the case. So we expect a counter-analysis/counter-arguments on that very topic, to wit the interplay and association of HR with the relevant agreement(s).But no.THAT IS ALL as far as Mr. Cornides and human rights analysis go at this post. He does not explain on a legal basis how IOs indeed promote and conclude agreements in total ignorance of human rights obligations as if human rights do not constitute a field of international law which can interfere with international actions/agreements. Quite honestly, given the aggressive tone of your post Mr. Cornides, I was expecting a serious approach towards the issue, a well-founded counter analysis of how, supposedly, human rights should not be taken into account when concluding MOU(s). But then the deficiency of your post was exposed- to use your own line of formulation- when I read that 'it would appear that Greece and its citizens have an unconditional human right to receive bailouts and similar transfers from other countries, including countries where the average living standard is far lower than in Greece'. Well, that is pretty much self-explanatory. We could go on and on noting that human rights obligations are exactly that- obligations, and, hence, it does not derive from anywhere that these relevant rights can be unjustifiably extended, let alone to the point that the above-mentioned excerpt of Mr. Cornides' post indicates. Or we could easily refute the above-mentioned allegations by noting that not only is the scope of the relevant rights not extended, but quite the contrary holds true: the de minimis standard is the issue at stake. But of course, spending saliva or, in our case, usurping our laptop keyboard is not worth it, since it appears to me that Mr. Cornides's response is not a legal, well- structured response to the specific context and arguments of Mrs. Salomon's post (which would be totally respectable), but instead seems to serve specific interests. After all, as the old saying goes, 'do not bite the hand that feeds you'. In that sense, I absolutely understand Mr Cornides' carefully selected approach.

    Jakob Cornides says

    August 28, 2015

    Tara, if you read my original post more carefully, you will see that it is not a eulogy of the package that Greece has accepted in negotiations in mid-July. Quite on the contrary, I find that package unrealistic. It will not work, and in one year (or earlier) we will be back at where we were.

    However, note that these sinister "international creditors" are actually trying to help Greece with hundreds of billions of Euros of taxpayer's money. One may have (as I do) doubts with regard to the expediency of their strategy, but it nevertheless is an absurdity to portray that help as a "human rights violation". Those rescuers are in fact not obliged to rescue, and Greece is not obliged to accept their help.

    So if you believe that the problem is "procedural", i.e. that certain impacts have not sufficiently been assessed, you are free to do so = but note that the primary reponsibility to assess the possible impact of the agreed measures on the Greek population is on the Greek government. But given that the choice is always between alternatives that are really available (and not between dream and reality) it can hardly be said that the process is "IMPOSSIBLE" to defend.

    Yes, I am a bit worried that human rights language is being appropriated for dubious political agendas, which in turn are built on bizarre victimization myths. All was very well in Greece until in 2008/2010 Wall Street and the "international creditors" decided to ruin the country??? Sorry, but I'm not buying this.

    From the point of view of legal theory, I'd suggest that every "right" or "entitlement" is mirrored by someone else's obligation. So if it is a "human rights violation" to suggest that the number of cleaning ladies employed in a ministry should be reduced (see Mr. Baros' post above), then someone owes me an explanation who should pay the salaries of these cleaning ladies if Greece's government has not got the means to do so? You? Me? Wall Street?

    Diane Desierto says

    August 28, 2015

    164 States Parties to the International Covenant on Economic, Social and Cultural Rights - including members of the European Union - assumed the obligation of international cooperation to progressively realize rights guaranteed under this treaty [ICESCR, Articles 1(2), 2(1), 11(1), 15(4), and 23. As Members of the Charter of the United Nations, States likewise assume duties of international cooperation with the United Nations to achieve the purposes of:

    "a. higher standards of living, full employment, and conditions of economic and social progress and development;

    b. solutions of international economic, social, health, and related problems; and international cultural and educational co- operation; and

    c. universal respect for, and observance of, human rights and fundamental freedoms for all without distinction as to race, sex, language, or religion." [Charter of the United Nations Art. 56 in relation to Art. 55]

    The International Court of Justice has affirmed that international cooperation can, and does, amount to a binding obligation for States [see Reservations to the Convention on the Prevention and Punishment of the Crime of Genocide, Advisory Opinion, 1951, para. 23], and it has also had occasion to declare the apparent breaches of the ICESCR in the 2004 Wall Advisory Opinion.

    The quandary lies with determining the terms of "international cooperation" according to ICESCR and UN Charter obligations. Mr. Cornides appears to argue a version of international cooperation where States take primary responsibility for their civilian populations, and the international community takes a subsidiary, gratuitous role based on their capacity and willingness to extend assistance. Professor Salomon ultimately shows that the terms of international cooperation should also internalize human rights impact assessments as part of economic decision-making by all actors involved, institutional or otherwise.

    I take Professor Salomon's point, with the caveat that the methodology for human rights impact assessments is not yet fully settled - many scholars argue different ways to measure how to comply with ICESCR rights, and the UN has only very recently adopted a (somewhat rudimentary) indicators framework to ascertain such impact assessments.

    But it is somewhat of a stretch to assume that any and all institutional creditors do not take rights compliance as part of their due diligence process. This is already taking place with Equator Principles financial institutions, with the World Bank's own evolving (and reviewed) environmental, social, and labor standards, as well as with firms that are partners under the UN Global Compact and the UN Principles on Responsible Investment. There IS some work taking place to internalize human rights compliance, but the foremost policy debates today involve how, and under what circumstances, such assessments are to be made, with the meaningful transparent participation of all constituencies and stakeholders involved.

    I am not at all privy to firsthand information on the nature of the substance and process behind the new bailout for Greece. But it is legitimate, as Professor Salomon points out in her post, to ask whether economic decision-making on the bailout was made with consideration for the actual foreseeable impacts of creditor terms on the economic, social, and cultural rights of the affected populations. Policymakers may well argue that the point of the bailout is precisely to ensure that protection, while observers may contend otherwise. But in the absence of real, updated, and ongoing information of potential foreseeable human rights impacts of the economic policies taken by States - including the terms of lending they impose on another State - how are these same States to make similar lending decisions one year later, when, as Mr. Cornides points out, the EU Member States have to go back to the negotiating table?

    Notably, it was the International Monetary Fund's Chief Economist, Olivier Blanchard, who admitted in 2013 that the IMF committed errors in prescribing austerity measures (http://www.imf.org/external/pubs/ft/wp/2013/wp1301.pdf). Given the demonstrated imprecision and outright error in the prescription of these kinds of measures that directly threaten an affected population's economic, social, and cultural rights, why is it illegitimate or unlawful to demand that States seeking to impose onerous lending conditions and other forms of austerity conditions should be properly advised of the risks that crises will continue, if not be exacerbated, by the resultant violations of ICESCR rights?

    Mr. Cornides fears a perpetual horizon of bailouts, and the fears may well be justified especially for other taxpayers in the international community who may themselves feel the economic pressures. But Professor Salomon's submission that human rights impact assessments should also be conducted do not only make perfect legal sense as a possible way to ensure international cooperation to realize ICESCR rights, but they also make sound economic policy sense for the accurate estimation of continuing risks to the affected population subject of the bailout programs. More information is crucial to ensure better, focused, and responsive policy-making. It is not only morally just and legally right to conduct such assessments, it is altogether prudent, cautious, and economically far-sighted for authoritative decision-makers to internalize this practice.

    Miroslav Baros says

    August 28, 2015

    It finally dawned on me: a competition "bringing the concept of human rights down" is taking place! My apology for late reaction, but somebody might have told me earlier!
    It seems that the very origin and source of international obligation is questioned here and that is why I am reusing and asking the readers' patience again one of my abandoned lectures on the very origin of the concept. Abandoned on the basis that the content was commonsensical as my students explicitly stated. I agree with the proposition that any right should be mirrored by an obligation; whose obligation we have to deal with here?
    Searching for the very source of international human rights obligation (I have to admit I am rarely challenged and asked to explain this) one can actually be pretty specific, which like in the present case I have to do in order to deal with a "dubious political agenda" challenge. But I may have a slight problem here since even the very foundation of international legal order or the international "constitution" as many argue are questioned and almost ridiculed ('human rights constitute "hollow rhetoric, which emanating from the UN does not lend it authority, but just increases the absurdity' - see the earlier post of Mr Cornides). So, again I will leave this one to readers to contemplate. Anyway, I am not referring here to the natural law school, Rule of Law etc. Instead I am suggesting that a general international legal obligation in this particular field can easily be discerned in arts. 55 and 56 of the UN Charter, which is referred to as a general source of obligation in Desierto's post.
    Turning back to Europe (I find it almost embarrassing that Europeans need this kind of reminder from time to time) it was the very origin and foundation of the European Communities and subsequently Union that provides for the origin of human rights obligation. Article 2 TEU states:
    The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights…These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail.
    Article 6 (3) TEU includes a provision that: "Fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States, shall constitute general principles of the Union's law." (Emphasis added).
    The origin and source of international, more specifically European human rights obligation do not emanate from a source extraneous to our values or from a "dubious political agenda".
    One of the regional responses to problems that globalisation is bringing to European nationals was the European Globalisation Adjustment Fund, which provides support for individuals losing their jobs due to globalisation. If the processes of globalisations are so innocuous why did the Union come up with such a fund one may deliberate?
    I also need to clarify the episode with cleaning ladies. It is more a tragic than indicative description of the phenomenon. I just couldn’t help noticing an incongruity in the Troika's (the IMF, ECB, EC) demand to sack 600 cleaning ladies and at the same time to continue with ruthless privatisation and selling of revenue generating assets to oligarchs. I will leave to the readers to decide whether my position here is one of a "dubious political agenda".
    As far as "why Greece, why not other nations" challenge is concerned I will simply refer to my earlier post where I stated that the international bankers ("sinister" I didn’t use but I like it; thanks Mr Cornides) sold subprime mortgages clandestinely as “mortgage-backed securities” for a huge profit to various financial entities in countries around the world, including the Greek banks, not only to them. As suggested in my earlier post I don't want to spend more time on those, economic aspects, but to imply that a Spanish, Italian, and Portuguese worker is more "productive" than their Greek colleague sounds pretty unconvincing to me. After all I think readers can find various tables on the Internet on the levels of debts of those states to the international creditors. But, again the real issue is this: can a human rights obligation be neglected on the basis that, allegedly and without much evidence, the concerned people brought the trouble on themselves? I vigorously again reject such a harmful implication.

    Jakob Cornides says

    August 28, 2015

    Somebody up there complained that I have not spent enough time and efforts to offer a counter-analysis of Mrs. Salomon’s propositions.
    There are two reasons for this.
    First, the point I really wanted to make is that Greece’s problem is essentially the lack of a sound economic policy, not the lack of respect for human rights (neither on the side of the Greek government nor on the side of the (mean-spirited or not) “international creditors”. So I think that the original post fundamentally misses the point: we should be looking for the right economic solution rather than framing every hardship that someone may encounter as a “serious human rights problem”.
    But then it is true that Mrs. Salomon is presented to us as an Associate Professor for Human Rights, so maybe it is her job to find a “human rights” problem wherever she deigns to look for one. However, and this brings me to my second reason: her argument really does not appear to have much substance – and where there is so little substance, it is hardly worthwhile to formulate a counter-argument.
    Mrs. Salomon’s text is lengthy, but in fact it mainly is a compound of quotations from various opinions issued by various human rights bodies – none of them really legally binding, all of them expressing opinions that one may or may not share – from which we may take a certain discontent that “human rights” issues were not sufficiently (at least not in a systematic and structured manner) taken into account when the various aid packages for Greece were negotiated. To add some colour to this, there also are some quotations from a former Greek IMF official, who with a sag face says that the IMF has no specific “human rights” impact assessment.
    Ok, maybe it is by knowing and quoting these texts that one gets to be a professor for human rights – but, beyond the vague concern and discontent that is expressed, where is the substance of the argument? Which concrete human rights have been violated, and by whom? Is the argument more than a mere “quis dixit”, and does Mrs. Salomon have a consistent theory what “human rights” are, and how they come concretely into play in the situation we are talking about. The broad reference to “economic and social rights” is somewhat too broad to make a good argument. But let us just look at two of these issues (apart from the cleaning ladies whom Mr. Baros has fed into this discussion…) = the right to culture and the right to health.
    The EP LIBE Committee, quoted in Mrs. Salomon’s text, deplores that “in order to meet the goal of reducing the number of public employees by a certain number, the entire structure of the national broadcaster was abolished.” Is that what she thinks is a “serious human rights violation”? Quite honestly, if in my country the government decided to shut down the national broadcaster they’d do me a great favour; I would not miss it a minute. Indeed, that would be a very sensible decision, and I can only regret that it apparently takes a crisis such as in Greece to come to such decisions. Is it a human right to have a national broadcaster? Do the US have one?
    More to the point, the essential human right that Mrs. Salomon seems to have set her eyes upon is the right to health. She writes: “Greece has seen budget cuts that have been followed by a 200% rise in the incidence of HIV/AIDS”, and Mr. Baros even goes much further when he says that “ hundreds of people are dying in Greece as a result of a lack of basic medical care and drugs”, which in his view engages issues related to art. 2 and 3 ECHR. In other words, the insinuation is that the “international creditors” are killing people.
    These are quite audacious statements, and they would certainly merit some substantiations (especially in Mr. Baros’s case), for example by demonstrating concrete cases and establishing clear causal links. In the absence of substantial argument, am I really required to answer to such affirmations? With regard to the increased incidence of HIV/AIDS, it suffices to indicate that the incidence of AIDS can significantly be reduced without much money, as was impressively demonstrated by the government of Uganda in the early 1990s, at a time where due to civil war the country received hardly any foreign aid (on this, I might refer you to Edward C. Green, Rethinking AIDS Prevention: Learning from Successes in Developing Countries).
    Moreover, it needs to be noted that the “right to health” does not confer a right to every individual to have access to cutting edge treatments and the newest medicines, but rather to “the highest attainable standard” of healthcare, which makes this right contingent on a country’s general social and economic situation. In substance, this rights confers an obligation on the (Greek) government to have a public health policy that is appropriate and affordable in the light of the country’s general situation. Not less, but no more. So even if any causal link between austerity and a deteriorating public health situation could be established, it seems somewhat far-fetched to speak of “serious human rights violations”.
    In the light of this all, I really don’t think I have done any injustice to Mrs. Salomon’s piece. It is easy for UN officials or human rights professors to lecture the world about human rights – but it is quite a different think to act as the government of a real country with real people to take care of and real problems to solve.

    Tara Van Ho says

    August 28, 2015

    I'm sorry, Jakob, but it's a tired old trope that human rights experts don't live in the "real world" and so "[i]t is easy for UN officials or human rights professors to lecture the world about human rights – but it is quite a different think to act as the government of a real country with real people to take care of and real problems to solve."

    International human rights law -- unlike other areas of international law -- was designed around an understanding of conflicting rights and obligations. That's partially to explain for ICESCR's Article 2(1), which is far from absolutist in its language or expectations. But what is required by ICESCR -- the obligation demanded by the right -- is that the state undertake efforts to progressively realize the rights in the Covenant. This does not mean the state cannot adopt cuts as part of an economic policy, but that in doing so it must account for its human rights obligations and justify the choices in light of the state's commitments. These commitments mean that we should be skeptical when states undertake cuts that have negative impacts on human rights, especially if those cuts are particularly damaging or if the state is spending money on meeting other demands, like the harsh conditions you yourself state are intended to humiliate Greek.

    It is not a particularly difficult obligation to meet -- and it's certainly one a state and its government can meet in the "real world". Yet both Greek and the states involved in the bailout all failed to meet this obligation.

    So let's take your example of HIV / AIDS reductions not costing much money. Greece *could* meet its right to health obligations in part by justifying cuts in health expenditures if it (1) simultaneously outlines less expensive ways in which it intends to meet its obligations to progressively realize health; (2) continues to meet its core obligation, including the one regarding the WHO's essential medications; and (3) adopts means of mitigating the impact of these cuts on the elderly, children, those with physical and mental disabilities, those with HIV / AIDS, and other vulnerable groups. Margot's premise is that it is not just Greece but Greece's creditors that have an obligation to undertake this accounting. Margot & Diane have pointed out some of the legal reasoning behind that conclusion, and I find it to be a very solid legal conclusion. Yet, none of those steps were taken when cuts to the public health expenditure were made. It is first in the failure to account for human rights that the states violated their obligations, and that failure to account has subsequently led to substantive violations of various rights.

    I have to leave it at that but I think you are generally wrong in your assessment both of Margot's post and of the human rights critique to the Greek debt crisis.

    Laura | Dutch law firm AMS Advocaten says

    September 10, 2015

    Thanks for your opinion on the matter professor! It really is the question whether the EU will find a good solution for the problem. It only seems to get worse. After all attempts the debt is still rising in 2015.