Info Service on UN Sustainable Development (Jun16/04)
27 June 2016
Third World Network
United Nations: Austerity policies undermining rights within the EU
Pubished in SUNS #8266 dated 21 June 2016
20 Jun (Kanaga Raja) -- Recent austerity policies are undermining
economic, social and labour rights within the European Union (EU)
and are hitting the most vulnerable, the United Nations Independent
Expert on the effects of foreign debt and human rights, Mr Juan Pablo
Bohoslavsky, has said.
This conclusion was highlighted in an end-of-mission statement following
his recent official visit to EU institutions to assess the response
of these institutions and of EU Member States "to the sovereign
debt and financial crisis from a human rights perspective."
The rights expert undertook the official visit to Brussels from 30
May to 3 June 2016, and his findings and recommendations will be detailed
in his full report to the Human Rights Council in March next year.
The Human Rights Council is currently holding its regular thirty-second
session from 13 June to 1 July.
In his end-of-mission statement released following the end of his
visit to Brussels, Mr Bohoslavsky (from Argentina) said he is deeply
concerned about a paradigmatic shift that is undermining the previously
balanced approach of ensuring economic stability, equality and social
cohesion, in favour of a disproportionate focus on budgetary stability.
"Austerity policies have unfortunately all too often gone hand
in hand with an undermining of economic, social and labour rights
within the European Union hitting the most vulnerable. In parallel,
inequalities in income and wealth have increased within Europe. In
addition to these outcomes, austerity measures do not appear to have
led to full financial and fiscal stability in all countries."
The rights expert noted that in response to the crisis, many EU States
resorted to austerity measures, to address excessive public deficits
and unsustainable public debt.
After the global financial crisis unfolded, 25 of the 28 EU member
States were at some stage put under the Excessive Deficit Procedure
of the European Union which kicks in when a State has a public deficit
above 3 per cent of GDP or is unable to bring its debt to GDP ratio
below 60 per cent.
In addition, Cyprus, Greece, Hungary, Ireland, Latvia, Portugal, Romania
and Spain were experiencing serious difficulties in relation to their
financial stability and had to implement economic adjustment programmes
as a condition for receiving stand-by support or loans from European
institutions and the International Monetary Fund.
According to the Independent Expert, there are currently about 21.4
million unemployed in the European Union, 4.7 million more than in
2008, before the global financial crisis spread.
More worrying, nearly every second unemployed has been without a job
for more than 12 months and long-term unemployment has remained high
in countries that underwent adjustment programmes (for instance: Greece
72.1 per cent, Portugal 57.4 per cent, Ireland, 56.2 per cent of all
The percentage of persons in the European Union who report unmet medical
needs and say seeing a doctor is too expensive for them, has also
increased after 2009.
"Disappointingly, in one of the most affluent regions of the
world, poverty has been on the rise," said the rights expert.
About 121 million people in the EU-27 are at risk of poverty or social
exclusion, 4.7 million more than in 2008, and their number has in
particular increased in Greece, Italy and Spain.
Children and women in Europe are more at risk of poverty and social
exclusion (27.8 per cent and 25.2 per cent respectively) than the
total population (24.4 per cent).
"In this context, it will be difficult to reach the target the
European Union has set for itself, to reduce the number of people
at risk of poverty and social exclusion by 20 million people by 2020,"
"It is paradoxical that when social protection was most needed,
social spending was often reduced. In some countries, in an effort
to ensure the repayment of public debt, public health and social protection
expenditures were excessively slashed," he added.
According to the rights expert, the core question here is why this
type of expenditure was particularly targeted by conditionalities.
"These cuts were often made in public health and social protections
systems that already were deficient to ensure that those most in need
would receive treatment or benefits."
In Greece, which Mr Bohoslavsky visited in December 2015, the overall
social protection budget stood in 2009 at 44.2 billion Euro. In 2014,
only 35.7 billion euro were spent, a cut of 19.3%, while at the same
time the number of persons unemployed or living in material deprivation
Public health expenditures in Greece were reduced from 16.1 billion
Euro (2009) to 8.3 billion Euro (2014), an unprecedented decrease
by 48.6 per cent. Poor patients are now relying on solidarity clinics
run by volunteers to receive essential medical services.
"There is a widespread belief that billions of taxpayer money
has been used or provided in the form of guarantees to rescue Greece
According to the rights expert, the amounts were indeed large, but
in reality the financial assistance provided through European financial
institutions returned to a very large degree to international lenders,
who had provided Greece until 2009 with loans without fully following
due diligence standards in order to check whether the country would
be able to pay back its debt.
In total, 215.9 billion Euro was disbursed under the first and second
adjustment programme from 2010-2014.
However, a recent study published by the European School of Management
and Technology in Berlin suggests that only a very small fraction,
9.7 billion - less than 5 percent - ended up in the public budget
of Greece; 64 percent of the disbursed loans were just used to pay
back the existing debt and interest, 37.3 billion or 17 per cent was
used to recapitalize Greek banks, while 29.7 billion or 14 per cent
of the amount was used to provide incentives for investors to engage
in the Private Sector Involvement (PSI) in March 2012, a haircut of
the Greek debt. Through the PSI, private debt was converted to a large
degree into public debt.
Looking at these figures from a human rights perspective, the rights
expert was inclined to ask: Who has been given priority? Who has mainly
benefited from the financial support? While bailing out banks and
stabilizing the financial system, was enough done to reduce poverty
and unemployment in Greece, Spain, Portugal and elsewhere? Were economic
and social rights given the needed priority to ensure that everybody
within the European Union can live in dignity?
"Poverty levels and the increase of inequality experienced in
those countries make me feel that this is not the case," he said.
In his view, the country's debt, currently estimated at around 180
percent of GDP, is highly unsustainable.
The International Monetary Fund recently published a scenario that
Greece's debt to GDP ratio will further increase to about 250 per
cent by 2060, if no front loaded debt relief is provided.
Debt relief is currently under discussion in the form of maturity
extensions, payment deferrals and lower fixed interest rates.
However, in the view of the Independent Expert, this would be "too
little, too late", especially for the thousands of people who
have suffered in the last years. Postponed debt relief will not restore
confidence in the Greek economy nor promote much needed investment.
Mr Bohoslavsky was similarly worried about the short and long-term
human rights impact of the latest austerity package passed under pressure
from international lenders on 20 May 2016 by the Greek Parliament,
which includes further cuts to pensions to the tune of 3.6 billion
Euro, and an increase of the Value Added Tax (VAT) to 24 per cent,
which hits poorer people more forcefully than the more affluent.
The package includes across-the-board spending cuts, should Greece
fail to reach agreed primary surpluses in the future, surpluses that
have been considered to be unrealistic by the International Monetary
Fund for Greece due to its very high structural unemployment.
"Such across-the-board spending cuts are unlikely, assessed in
relation to their social or human rights impact. They would repeat
past mistakes, further undermine the Greek economy and deepen the
economic and social rights crisis within Greece," the rights
"My point is that obligations under human rights law should be
a legitimate and necessary constraint when designing and implementing
macroeconomic policies ... My point here is to stress that irrespective
of the macro-economic policy chosen, there is a need to ensure that
human rights are fully respected and that nobody is left behind,"
While Member States of the European Union are primarily responsible
for adherence to their international human rights obligations, international
institutions, including the European Union, its bodies and financial
institutions are not beyond the reach of international human rights
law, the Independent Expert stressed.
This applies to international organisations, including multilateral
financial institutions, such as the International Monetary Fund and
the World Bank.
"When making policy recommendations or setting binding conditionalities
for providing loans, institutions and bodies of the European Union
have - at an absolute minimum - to respect international human rights
treaties to which all their Member States have become a party."
The rights expert reminded all EU Member States (including euro area
States acting as international lenders) that they are bound by the
International Covenant on Economic, Social and Cultural Rights, and
other relevant core human rights treaties they have ratified.
"States parties to the International Covenant on Economic, Social
and Cultural Rights would be acting in violation of their obligations
under the Covenant if they were to delegate powers to an international
organisation (e. g. the ESM or IMF) and allow such powers to be exercised
without ensuring that they will not infringe on human rights."
Mr Bohoslavsky noted that the European Union has developed several
guidelines and tools for carrying out social and human rights impact
"However, when it comes to macroeconomic policies in the context
of financial crises, human rights standards have so far not been explicitly
used as benchmarks to assess economic reform programs. It is therefore
deplorable how little lending conditionalities were formally assessed
on their potential harm to human rights- holders before they were
The rights expert welcomed the fact that the European Commission has
undertaken for the first time, in August 2015, a social impact assessment
for the 3rd economic reform programme currently implemented in Greece.
Regarding it as "a first step in the right direction", the
Independent Expert however said that this social impact assessment,
produced on short notice, does not have the ambition to assess the
economic reform measures against international human rights standards.
"Economic reform programmes should not only undergo social, but
also human rights impact assessments that live up to their name. Such
assessments should be carried out in consultation with affected rights-holders
and civil society and be more than tick-box exercises in order to
In addition, he said, evaluations of past reform programmes should
not only assess whether they managed to reduce budget deficits, restore
debt sustainability, or enhance economic growth, but whether they
ensured a fair and equal distribution of the burden of adjustment
"We need to put the human person back into the equation, as the
economy should serve the people, not vice versa. Therefore, it is
absolutely relevant to know to what extent economic and social rights
have been successfully protected in the context of adjustment policies,
what gaps exist and who is most affected by lack of protection of
The Independent Expert said that this exercise would not only allow
learning from past mistakes to be better equipped for the future,
but ensure that identified infringements of social and economic rights
can be addressed and corrected.
"No credible argument could be made that what should be done
externally for the benefit of rights holders outside the European
Union, cannot be done internally, for the benefit of its own EU citizens
Rather, said Mr Bohoslavsky, a human rights-based approach should
guide country-specific recommendations to EU member states in the
field of macro-economic policy and the lending policies of European
institutions to its own EU member states.
"States need sufficient fiscal space to ensure that they can
protect and progressively realize economic, social and cultural rights.
Debt obligations should never take preference over human rights."
It is therefore equally important to combat tax avoidance and tax
evasion to prevent States falling into a debt trap and to ensure that
they have sufficient revenues at their disposal to uphold economic
and social rights.
"It is time to revive social rights within the European Union,"
said the Independent Expert.
In his view, some recent initiatives from the European Commission,
such as the European Pillar on Social Rights, will contribute to this
"I have stressed during my visit that such a pillar needs to
be based on a solid foundation".
This foundation should not only reflect the social acquis of the European
Union, but also build on the international human rights obligations
of EU member States and the recommendations emanating from international
and regional human rights mechanism, Mr Bohoslavsky concluded. +