Tag Archives: EU

Brexit Coup d’Etat: Tracking the Overthrow of EU Rule of Law in Britain

Historical Note

This analysis was researched and written days before the snap June 8 UK election which was about to lock in the electoral minority of the ‘Brexit referendum’ with no public understanding of the immense historical stakes and dominant powers involved behind the political scenes. Least of all recognised was that the hard Brexit led by the now minority-government Tories allows massive de-regulation of the most powerful transnational private financial and agri-food interests in the UK and the EU. Yet no sooner had I completed the body of the following analysis than the London terror attack struck on Saturday night June 3, with PM Theresa May pointing at all opposition who sought causal understanding of the terrorist attacks as showing “far too much tolerance”.  The first pages of the analysis below bring this pre-election turn of events into explanation of the slow-motion ‘Brexit coup’ that continues today before it is fully understood. While the June 8 2017 election turned against the Tory-May government as anticipated by this June 5 diagnosis in media res,  the global struggle for life-protective law still remains under more systemic threat than since 1945. The purpose of this publication (the article has  been published widely in post-election form) is to share with fellow scholars how thinking-through within the immediacy of events can make an historic difference before a managed turning point of history is instituted into a no-turning back de-regulation attack on life-protective laws and common life assets to serve only very powerful financial interests with the public and opposition kept blind to, in fact, the biggest single attack on the civil commons of Britain in its history.

 

In the Midst of the London Terror Attack

It is June two days before the snap June 7 UK General Election is set to lock in a referendum to leave the European Union unsupported by a vast majority of British voters and – with little or no notice – reversing 50 years of evolved financial, labour rights and environmental regulations. These little discussed facts are spelled out in depth ahead. All the dots are joined from the start of the Leave campaign whose overthrow objective, strategists and behind-the-scenes money and interests are only beginning to be known.

It might seem too late for British voters to do anything about it, but much that is unexpected has occurred since the snap election was called and whited out in the press until recent days. The 24-point lead for new PM Theresa May and the Tories over grass-roots Labour and Jeremy Corbyn long seemed a sure thing, and so it was planned. But the lead has collapsed towards less than a few points and still dropping.  Then the London terrorist massacre on Saturday night June 3 struck on cue. For the public was awaking to the dressy mock-up Margaret Thatcher, and the rising Jeremy Corbyn opposing her is a near unique leader in British politics – an honest man based on a grass-roots movement for workers and the poor.

 

 

The Corbyn Labour Threat

Corbyn is not only honest, which none have denied. He has showed himself over a year capable of standing up to a non-stop corporate media barrage of official loathing. He has not backed down from the near public ruin of his grass-roots movement in which war-criminal Tony Blair and his ‘New Labour’ ilk have led in trying to sabotage his movement – barking out front, ostentatiously resigning from cabinet, tearing apart the reclamation of the Labour Party from the corporate boardrooms where it had become Blair’s Murdoch-press lap-dog and a neo-liberal shell. The reason Corbyn was and remains an enemy of the ruling castes in the media, politics and the boardrooms is that he unapologetically stands for traditional socialist values. His program is not contaminated as almost everywhere else by trendy post-modern culture, saucy relativism and politically correct diversions from economic life substance. Even worse to official media-and-political culture and its submergence in capitalist globalization with no alternative, Corbyn and his politically grounded movement actually stands for British workers’ interests, the public sector, social services, and environmental safeguards as developed within the European Union – all of which are on the chopping block now in Britain and across the world.

 

 

The Ruling Agenda

The problem is that majority of citizens in the world support these long-developed and popular social infrastructures and life standards. So the only way of continuing to defund, privatize and erase them is by pretending there are much more modern and flexible marketable versions for corporate and bank profit. One way or another, and there are many ways, this process consists in historical reversal and laying waste to over a century of social evolution and life standards as the ruling agenda of establishment political parties in power. This hidden agenda has increasingly spread and ruled the world. All the degenerate trends of extreme inequality, private money power over all, rising youth unemployment, pervasive state corruptions, massive dispossessions, override of long-established workers’ rights, and multiplying ecocidal production and products stem from it.  The vast profile of one-way degeneration of social systems across borders is, however, never connected across the dots by corporate media, states or the academy itself. Rather the underlying agenda euphemized as ‘globalization’ is put on fast-forward.

 

 

New Right-Wing Nationalism is Another Brand for the Same Hidden Agenda

It may seem that the erupting new ‘nationalist’ movements in US and Britain, Eastern Europe and Russia, and so on, are the great swing back against corporate and bank globalization. This is the Great Illusion of our time. What is hardly yet seen is that, in fact, these ‘nationalist’ movements, as in Tory Britain or Trump US racing ahead today, do nothing to connect or to solve any of these life-and-death social system problems and the cumulative pollutions and razzings of organic, social and ecological life organization across the globe. They are only a speed up of the global eco-genocidal processes under new operations and pretexts of new national recovery and freedom. Yet always the same transnational corporations and banks make even more money than before, mostly from transferring public wealth to themselves by vast tax-cuts, increased subsidies, steep cut-backs on social services and spending, and elimination of everything that is not needed for short-term profit cycles. Of course the opposite is pretended in many ways varying with cultures, but always good for the working people. Still, one can always tell the real agenda by whether or not the ecocidal processes and products are effectively ruled out rather than accelerated in fact, and whether or not societies are so governed that more citizens become better off in life work security and free development rather than the opposite in fact.  This is where the facts as opposed to pervasive system rhetoric and claims show systemic degeneration and dispossession in human and ecological life terms. Seek exception in scientific fact. Seek anywhere that Tory (or Republican) rule meets even one of these problems rather than diverting from them in endless ways – most of all today, by Islamic terrorists. They are the ever-recurring Enemy to be waged war against – and typically is when the popularity of the ruling party is dangerously in question.

 

 

London Terror Spectacle 5 Days before Election as Brexit-Tory Polls Collapse  

The June 3 massacre of innocent and unarmed Saturday revellers on iconic London Bridge and Borough Market came at such a time. PM Theresa May and Tory party polls for the snap June 8 national election were in free fall as Corbyn Labour support unexpectedly and dramatically rose by over 20 points from the surprise Spring date that the new and secretively advised PM May had called against all prior commitment and earlier schedule of May 7 2020. Although only 7 people died – in Moscow at the same 9 people were murdered without much notice – the absolute panic of the central city of London and Europe was unprecedented.  A white van ran over people on London Bridge’s festive and pub-crowded Saturday night, and many were seriously injured – though fewer than in US drone or air strikes happening in Arab countries on a regular basis. The modus operandi was quintessentially monstrous in action. It could have come from an ISIS video – of which there has been many with no evident interruption by the immense counter-terrorist operations, advanced electronic capabilities, and ever-rising budgets for war upon ISIS terrorists.  The three soon-dead men were maniacal as if drugged, but no drug tests were ever reported. They not only viciously ran over as many people as they could with the signature white ISIS van in the 10 PM Saturday night happy hour, but they leapt out of this careening kill van with long Arab stabbing, cutting, slitting throats, multiply stabbing one young women, and – in short embodying the most murderous nightmare conceivable on all in London and around the world soon watching the globally televised aftermath including the dead bodies.

 

 

The Most Basic Questions Are Never Asked

Strangely, the suicide murderers wore fake suicide vests, never explained. Certainly the theatrical touch fitted the stereotype for both sides. Yet no-one in all the total coverage everywhere ever mentioned the abundant evidence of US-led funding, arming and orchestration of ISIS – although the mystery still remained of how their original appearance in spanking-new white vans lined to the horizon waving machine guns could have escaped the notice over the endless parade in a highly surveilled open desert area not far from Israel’s borders. In any case, the horrific downstream event and mysterious origins and orchestrated funding, training and arming of the very same terrorist organization perpetrating one atrocity after another with uninterrupted e-video broadcasts and propaganda over years were all unmentioned in all the allied analysis from the major networks across the globe. Only the international outrage and absolute denunciation pouring in and out from every quarter continued around the clock for days all the way to the two days left before the election. Since the main question was and remains how to stop these horrible terrorist spectacles, there was no time for causal analysis. There never is. Somehow the evidentiary matters of including who funded, armed, trained and orchestrated the terrorists are never investigated by those who report on and benefit from the terror attacks. Somehow the terrorists’ very accessible propaganda, videoed columns of ferocious operatives, internet movies of killings, and strange coincidence of attacks with falling popularity of state leaders are not connected by anyone in official society or mainstream media or even scholarly journals.

That all this has kept happening from years ago in full view of television and internet audiences around the highly militarized Western world is not an issue which is publicly raised. Even when the murderous terrorists have been known and identified immediately afterwards, from the 9-11 bombings on, still there are no questions in the pervasive media coverage of the events, including in the June 3 London massacre. How they were and are identified so very quickly, even after such an historic surprise attack as 9-11 and even when the bodies of the alleged terrorists have been completely incinerated, how and why are these issues never mentioned?  Cui bono? – the first question of forensic justice – is never posed of anyone after the murderous terrorist spectacles. Failing parties and leaders who benefit enormously from such show-stopping distractions which put them in far more command of popular support and power than before the attacks, are never even slightly exposed to this question.  It is taboo to do so. Not even opposing politicians dare to ask the question. This gives us the clue to why all the other issues are not raised.  No such basic forensic question is ever posed because it cannot be publicly asked without every media of record accusing the questioner of folly or menace, thus perfectly diverting the issue again from the ruling taboo subject. There is no evident way through this closed circle. It is foolproof. So it follows that this is well known in ruling circles as well as by those interested in truth. Why would it not be used by a national regime whose public support is falling just before an election?

Free-Falling Tory and PM Polls and the London Terrorist Attack

Scientific hypothesis looks for disconfirming evidence more than confirming evidence in order to test it. This is why science works when it does. It takes all the relevant facts into account, forms an hypothesis, and tests it against the best possible counter-evidence.  (Corporate science and regime propaganda do the opposite. They look only for what confirms their claims to profit them. So coming just 5 days before the snap British general election which her regime called when it was 24 points ahead in the polls – now continuously falling days before election – this  regime has very good cui bono reason to re-set the polls upwards.  The known best way to do this with no questions asked is for a terrorist attack to occur on the regime. A terrorist attack usually guarantees a spike of citizen solidarity with national government, from France to Turkey to 9-11 Bush US. No-one dare pose the cui bono? Question in any case. It is known that a grisly terrorist attack, and a strong condemnation of it from the regime in power, along with allied regimes in unanimity, will produce a significant rise in the next poll. In this case, the poll of the June 8 British general election comes less than 5 days later.  This does not mean that the front political leader, now – PM Theresa May, the longest Home Affairs minister in memory, plans the terrorist attack, or even knows about it. It would be better that she did not, so as to carry through without compromise or leak. But she knows the territory of Home Affairs very well and the dark state’s capabilities, as well as British public opinion over many years as a cabinet minister.

If her polls are suddenly collapsing, as the polls of the long-belittled Labour leader Jeremy Corbyn rise just as fast, it makes very good sense for her regime to find a terrorist attack incomparably useful just before the election. She can stand tall and resolute as the lead warrior of the British people, like Margaret Thatcher against the Generals of Argentina over the Falklands. But here the enemy is far more immediate, visibly evil and mass murderous before our eyes – the archetypal enemy of Islamic terrorism, threatening and murdering Britons inside the very celebrating centre of their most populous and globally popular city, spreading mass panic to thousands in a barbarously brutal killing and wounding rampage that no-one will ever forget. It also provides the ideal opportunity to excoriate the poll-closing Jeremy Corbyn and Labour, who can be insinuated into the terrorist menace by his connection of terrorism to past government actions.

 

 

PM May Leaps to Attack Democracy as the Unseen Brexit Coup Closes In

PM May has all the credentials and image to rise to this occasion, and to pull off what no-one has really yet seen –the greatest reverse of British social and environmental standards and law in history that is about to be locked in by the June 8 election. The half century of evolved EU workers’ rights, life-protective laws, and scientific environmental norms is about to be overthrown. The London terror massacre occurs on June 3 as Tory and PM May polls  relentlessly slide down and the turning-point snap election is just hours away. State authority is restored in a blinding flash of action. Police command people “to run for your lives and hide”. They  command people to lie down in the areas they control, and to hold their hands over their heads as they are herded in large obedient numbers. Loud explosions are heard all over the place where there are no terrorists, and it is only 8 minutes before the terrorists are all dead for all to see on TV. Dead men cannot speak. PM May is strict and aggressive to rally the masses against the Enemy – and to reverse the Labour opposition’s rising polls. Election campaigning is suspended. PM May accuses those who sought have causal   understanding of the terrorist attacks as showing “far too much tolerance”. She warns that there is “a new trend in the threat we face” – although there is none evident, except raising the indisputable facts of its causation, as Corbyn had done just before his polls began to overtake her. PM May scolds, “Enough is Enough”.  The same old circle of blame-the-enemy while doing nothing effective to stop it is redrawn deeper than before. But she darkly warns others that things “cannot continue as they are”. She suggests that “pluralistic British values” are at fault. She leaves the cause of the endless terrorist spectacles behind to accuse the free internet itself, demanding once again the new Tory policy of sweeping new state regulations across citizens and borders, rather than honing in on ISIS and other long scot-free channels. “There is”, she says, “to be frank, far too much tolerance of extremism in our country”. “So we need to become far more robust in identifying it”, she proclaims in police-state code, “and stamping it out across the public sector and across society”.

Public sector? Across society? Is this a declaration of war against those in the public sector who dissent from the program? Is this a foreshadowing of the social-sector stripping to come with the Brexit coup d’etat? Where does the attack end? It does not. There are no definitions, no criteria, no evidence. There only more insinuations of who must be labelled and stamped out as ‘too tolerant’. There are only more demands for more state powers diverting completely from every issue involved not only in terrorist killing, but in the end of EU rights and laws in Britain. Most of all and most profoundly, every word and position of PM May, the Tory party and the forces behind them have distracted from the ultimate geostrategic game afoot that the London terrorist spectacle has diverted from and covered up. What could the huge and unexamined stakes be here that none discuss? Who alone stands to benefit from every step since PM May was promoted?

 

 

Why Brexit?

There has been endless commentary on Britain’s “Stay or Leave the EU” referendum and the narrow victory of the ‘Leave’ side after 44 years of partnership in which Britain’s GDP, human and workers’ rights,  and environmental protections have only increased, and by far more than the US. Even in gross market money terms, the record is clear in fact. In a letter to the London Times one year ago, Oxford researchers Professor Sir David Hendry, Professor Doyne Farmer, and Dr Max Roser refuted with no reply the Leave EU campaign led by financial and political playboy Boris Johnson. “Since 1973, the  year in which the UK joined the EU, the per capita GDP of the UK economy grew by 103%, exceeding the 97% growth of the US. Within the EU, the UK edged out Germany (99%) and clobbered France (74%). The UK’s growth has exceeded the US while tracking it, even since the crisis of 2008”.

Yet Leave the EU still narrowly won the UK referendum a year ago with nothing to go on except propaganda, and its very dubious result is about to be cemented into British government and history by the June 8 election in 3 days. On every level on which we analyse this decision now being led by PM May and the Tory state, it is a fails every smell test. But the real motive force and private money-party interests behind it are all but invisible to the public – not only in Britain, but around the world. There is virtually no recognition that the snap June 8 election in three days is going to reverse every life-serving law and regulation that has lifted Britain up over half a century from the doldrums of the early 1970’s when Britain was regarded as ‘the sick man of Europe’ in economic performance. How could this happen?

To begin with the referendum itself, the original wording of the ‘Brexit’ referendum was (italics added) “Britain should remain in the EU – Yes or No”. Few observed that this framing of the Tory question appeals directly to the tidal wave of popular resentments that have built up against transnational trade treaties and mass immigration everywhere, Britain included. “Should remain” is re-set to “Leave” as the dominant choice in this negative social context with, in fact, no connection to life co-ordinates. On the surface, the visible movement of foreign-speaking cultures into everyday rural Britain for new benefits and low-wage competition with British workers has widely inflamed anti-passions, as anyone familiar with British culture knows.  The near daily featuring of Islamic ‘terrorist attacks’ has stigmatized the EU system along with such continuous disorders as the torturous financial ruin of Greece. Leave on the ballot in a mysteriously well-funded and media-captivated campaign triggered enough of a primordial anti-EU sentiment that a very slim majority was won. It did not matter that false claims and demagogic showmen were given immense publicity in the Leave campaign in which the most important issues were completely out of the discussion. Nor did it not matter that the Leave vote was mainly rural England, nor that remaining Scotland was thereby propelled into breaking up Great Britain itself. There were no editorials exposing the facts that the new-PM Theresa May had herself warned UK voters that Brexit was “dangerous” and could have seriously damaging effects on the economy, the security, and the survival of the United Kingdom.  There was no media memory that she had said that leaving the EU would be “fatal for the Union with Scotland” and that she had formerly proclaimed “as Home Secretary [that] remaining a member of the European Union means we will be more secure from crime and terrorism”. Nothing seemed to matter except the new fait accompli of Britain ending its half-century partnership in the European Union on the flimsy basis of a referendum for which the overwhelming majority of citizens did not vote or approve.

 

 

Minority Brexit Vote = Massive De-Regulation of Finance and Food 

No-one seemed to report that this Leave vote itself (17, 410,742) represented only 37% of the total electorate (46,500, 001) as enumerated by the Electoral Commission. No mainstream media featured the 12, 948,018 voters left out of the count, over two-thirds the number of those who voted Leave. Only one source clearly reported that those whose votes were not cast in the single June 23 event voted 2:1 against leaving once the results were known (cf. http://blogs.lse.ac.uk/brexit/2016/10/24/brexit-is-not-the-will-of-the-british-people-it-never-has-been/). Most deeply and unspeakably, there was no hint of media attention to the first question of forensic inquiry, cui bono or who stands to gain most from British government leaving the European Union all its common regulation? Even up to June 2,  no-one has joined the dots that show the Leave EU referendum and vote has been an ideal political bludgeon to force Britain’s departure from the historical European Union just as its long-evolved Directives are in the process of enforcing policies and regulations on all-powerful London private banks and finance, and on industrial Big Agriculture and GMO-contaminating crops and fake foods . What no-one has evidently understood is that Brexit ensures that the very same dominant financialization forces that have hollowed out Britain’s working people, the productive economy and its green environment since 1979 are now freed from any EU regulation or accountability just as effective new financial oversight mechanisms as well as organic agricultural and food policies are due to be further implemented, monitored and enforced. This is the undertow historical meaning of the near-hate campaign that has been waged for endless months on the ‘EU bureaucracy’ larded in selective anecdotes without principled substance. Such is the standard method of big-money campaigns against public regulation for the public life good. If more private profit is not fixed into the new regime, it is relentlessly attacked and denounced as ‘suffocating red tape’ and a ‘ruinous burden on business’. This is the signature demand and condition of transnational corporate rule.

 

 

Cui Bono? Remembering the Past to Now

The rootless global money party centred in London has long run Britain with flagrant Thatcherite governance for transnational banks and corporations, overthrowing the post-War labour-capital settlement in Britain. Big London money backed by the Murdoch press was then consolidated in Blair’s ‘New Labour’ capitulation to corporate power through Gordon Brown Labour-light to the election of financier-scion David Cameron. PM Cameron then took the Brexit spectacle as the occasion to resign to avoid, insiders say, the outing of his unexposed financial fraud as PM. Now the government of Great Britain is in the hands of a secretively advised Theresa May. Although as Home Secretary she was unequivocally anti-Brexit, something happened. Despite the very dubious results of the leave-the-EU referendum, she reversed field from support of the EU once in the PM office, and was instantly re-branded as full-square behind Leave as “Brexit is Brexit” and “the irreversible decision of the British people”. Now-PM  May has led official erasure of the fact that the winning vote was only by (official Electoral Commission tally) 37 % minority of voters. In the same vein of memory-hole command, PM May and her backers  ignored the LSE scientific survey reporting that non-voters polled 2-to-1 against Leave once they learned the outcome. The reigning protocol, as with Trump with whom she became bonded in ‘the special relationship’ of the US and the UK that runs British politics, is to annihilate life-protective regulations as new freedom, and enforce follow a bigger corporate tax-cut than Reagan or Trump to a 10% level. Where did the mandate come from for such radical hollowing out of government capacities to govern on behalf of the common interests of society, citizens and their environment? There has been no mandate, but only a one-off 37% popular referendum result with no legally binding force until it is locked into the ‘Great Repeal Act’ and June 8 UK election to legitimate it with no public understanding of the meaning.

The die had been cast behind the scenes. A 37% vote against the considered will of the majority to stay in the EU was going to be used as a no-alternative mandate for massive deregulation and de-taxation of big money powers across the UK without public debate on these issues or even recognition of them.  An Orwellian erasure of facts and totalitarian silencing beneath conscious choice continued right up to the election without anyone evidently knowing it. The PR cover-up since the ever-more lavishly suited Theresa May became PM  has been to brand her office in Maggie-2 resonance as a resolute and honourable defender of the democratic will  of the British people and an anchor of stability to steer Britain’s new future. PM May and advisers have accordingly changed the 2017 general election –she had committed to 2020 before her behind-the-scenes management took over – to an ad hominem vote over her character as PM, not about the radical de-regulation of finance, the environment and the tax code to, in essence, serve the rich while dispossessing the great majority of their labour, social and environmental protections and rights. It is the sort of action from the top that the original Magna Carta stopped by regulating an out-of-control King, only now the unaccountable ruler is bank and corporate money profit seeking even more unequal and total rights over the soon- to-be rump England. The money party cares nothing for nation including  Great Britain except as it fits their divide-and-rule agenda over the trillions of dollars they control daily in play for more asset control over the world. Now firmly in the supreme office with cabinet and media support, PM May’s office has masterfully managed transition to doing the opposite of what she formerly stood for. The Brexit program for private money control over public forces and rules of how society is to live has remained unflagged by even the Opposition and radical left voices.  None see through to the ultimate ruling party behind political scenes, nor to the ultimate fact that it is not economically efficient or even productively capitalist. Its hidden financialization forces and anti-labour-and-ecological agenda of radical de-regulation are, in principle, counter-productive, parasitic and self-multiplying against the common interest of its social and environmental life hosts.

 

The Unasked Questio: Who Wins Now?

On the PR face of it, Theresa May is the clergyman’s daughter soundly risen to PM office. But she is, more deeply, the perfect foil behind which to sneak a Brexit end to the threat of EU regulation of the most life-destructive private money powers of Britain. Brexit is in sinister parallel with the life-blind deregulatory forces of the Trump/Republican forces letting the ruling money party run free to become multiply richer while stripping scientific environmental regulations, monitoring and prevention of cumulatively ecocidal externalities of global financialization and environmental toxification. The difference is that the English financial and factory-food lords are far stealthier and unseen in their demonstrable strategic plan to Leave the EU because it leads the world in scientific method, life-protective regulation and implementation. No-one seems yet to recognise this in the UK, unlike the rising US awareness of at least the Trump-Republican threat to the US and global environment and – more specifically – the Environmental Protection Agency and even the century-evolved and world-leading US national parks. “Making America great again” excludes the life ground. When PM Theresa May now hard-presses Leave the EU even when formerly opposed to it – most of all because of its weakening of Britain’s defences against terrorism – who can doubt something has re-motivated her to reverse the agenda.

The tell-tale avoidance of truth is seen when she lashes Jeremy Corbyn for even  connecting the terrorist operation of Manchester back to the facts of Britain’s war-waging in poor foreign nations from which the suicide bombers come. “Many experts, including professionals in our intelligence and security services,” Labour leader Corbyn  observes, “have pointed to the connections between wars our government has supported or fought in other countries, such as Libya, and terrorism here at home.  Joining the dots is taboo.  In such closure to facts, PM May implicitly justifies government actions on the basis of the legitimacy of past state actions which are war-criminal under international law, and – beneath notice again – stopped Libya specifically from its gold-dinar Bank of Africa plan based on oil revenues to lend to other African countries without the debt enslavement long coveted by London-connected private financing of states (including the British government itself). Who do these actions of repression of war-criminal facts and seizure of other people’s assets serve?

In this light, consider PM May’s capacity to carry Leave the EU as PM compared to its most charismatic leader on the ground, Boris Johnson. Although he has long been London finance’s man as Mayor as well as leader of the Brexit campaign, the master plan cannot go forward with him any further because, as a known liar and bounder, he is completely unfit as a credible finisher in PM office. Those who lead here know very well how to rule behind effective public relations to keep their control acceptable on the public stage– as Wall Street has done with one elected US president after another. This is why the known libertine and shameless US-born self-promoter Boris Johnson was – however charming and useful – stopped for the job of ‘Prime Minister of Great Britain’. He might indeed provoke cross-party reaction against pushing a onetime minority poll into a reversal of modern British history which took away the EU passports and future opportunities of England’s young professional classes.

There is much to cover up here that needs a steady woman ruler with a better manner and more socially just in bearing. So Prime Minister Theresa May it was. Thus the sole regulatory powers in place keeping the private financial superpower of London in check against another 2008 emptying of the public treasury and pensioners’ incomes – not to mention the deregulation de-greening of England by an industrial factory frankenfood system – escaped the public’s attention. To credibly cover up what nobody knows while believing in her mission is made-to- order for PM May, and so the Trump-like mega de-regulation and de-tax agenda has gone all the way to days before the June 8 British general election with far less fuss. Boris was meanwhile made Foreign Minister to insult the EU onto their heels in England’s revolution backwards for the unproductively and villainously rich. Few noticed that all these political shenanigans served a unifying function. The new EU financial regulations on London’s big banks could not be implemented, monitored or enforced with Brexit stopping it all in its tracks.  EU Organic Agriculture Regulations protecting the environment and natural ecosystems from genetic contaminations and industrial clearances of green life was simultaneously terminated with hardly any notice. That foods themselves are released from safe and scientific EU standards has remained a non-issue. For poignant household example, British demands for hygiene standards to be changed to US rules so as to permit chicken meat sanitized only by chlorinated water, to allow beef raised with growth hormones, and to free genetically engineered substitute foods or GMO’s from production and label restrictions have all been stopped dead by Brexit.

With London finance as well as industrial agriculture and false foods freed from codified norms of responsibility to the common life interest long evolved, tested and instituted within Britain and the European Union, the most predatory and counter-productive forces in Britain are allowed to run free with no public notice before the June 8 general election.  EU labour rights (eg., 48-hour week), human rights (e.g., employees’ and prisoners’ rights), financial oversight of any independent kind (as we have seen), and virtually all environmental standards developed beyond the US model, all  are discontinued by  the Great Repeal Act. With no evolved EU standards of economic, social or environmental protection legally obligatory and enforceable any more, the June 8 election will lock it all into the future with no way back that can be reasonably relied on without electoral reversal. With all the historical bearings and force of precedent, independent adjudication and law left behind by Leave, a US-UK deregulation and de-taxation orgy can proceed as ‘democratic’ if PM May wins the election. This is why PM Theresa May as the first head of state to visit the White House came out of their private meeting holding hands with Donald Trump. Demonstrating its confidence in the liberated financial rule of Britain as the Great Repeal Bill proceeded, Goldman-Sachs simultaneously committed to a $500-million headquarters in central London.

 

 

London Finance with Goldman-Sachs Escapes All EU Financial Regulation

The very definition of the EU Central Bank’s mandate to investigate and supervise “the business model, risk management, and capital, liquidity and funding”of private-profit bank and financial institutions including London  (via a rigorous Supervisory Review and Evaluation Process by elite teams of professional accountants)  is anathema to the long unregulated US-UK financial system. London finance like Wall Street is very used to increasingly devouring public treasuries, pensions and savings to become 40% and rising of the entire economy. They have done this through the global financial meltdown they have caused to multiply their money-demand control of the planet in a myriad of algebraically concealed ways with no oversight supervision, no independently verifiable standards, and no real reforms. The European Central Bank has finally moved to institute common standards across the Union – what was done after the Great Depression but has been reversed since. Private London-Wall Street banks and finance will do anything to stop this regulatory reform to protect their many trillions of assets and liabilities running free to continue unimpeded in the greatest unearned and still rising transfer of wealth to the rich in history. The economic stakes are unprecedentedly high, and so the silencing of any notice of the reforms to regulate them has in the UK been total in the mass media and even in Labour policy recognition. Consider the vast treasure involved. “Existing financial rules” in London banks have been officially judged by independent experts as “woefully inadequate”, and all of London’s foreign currency trading (globally dominant and largest in Euros) remains unregulated and untaxed.

Vast investment banking, cross-border sales of securities, Euro liquidity to clearing houses, non-performing loan recognition, coverage and write-offs also escape independent regulation by Brexit and the Great Repeal Act. Revenue-cap norms on skyrocketed financial pay to executives, standards of internal audit, deferred tax assets and credits masked as capital, capital adequacy, liquidity requirements and ability to pay liabilities are all also blocked by post-referendum laws. Unnoticed too are overdue binding norms on regulating the competence of new members of management and key function holders (say, Boris Johnson) and oversight of collective investments in transferable securities by captive states and unilateral tax advantages gained by their public issue and sale for profit. In sum, the Capital Requirements Directive and Regulations are set on fire by the Great Repeal of European Union obligations, now to be locked in by the June 8 election. What are boasted as ‘elegant and sophisticated innovations of investment instruments’ and so on, are in fact systemic methods of fraudulent diversion with no qualified, independent accounting authority allowed into check their schemes fixed to maximally profit powerful private financial dealers against transparency and liability, elected government accountability, and the common interests of everyone else.

 

 

The Great Silencing

This whole joining of fateful dots has been covered in silence. Big London bank and finance has so far got away with veiled abolition of all the overdue EU financial rules, monitoring and enforcement to regulate them after the 2008 financial meltdown in which an estimated $26 trillion of public money has been swallowed by the transnational private banking system led by Wall Street and London. In faint contrast, there has been a slight exposure of the Brexit reverse of evolved EU environment protections, monitoring sciences, directive laws, and feed-back enforcement processes. But here too any information has occurred only in fragments, with no connections to the EU’s life-protective binding rules on industrial farming, GMO products, and industrial chemical pollutions and toxins. For example, you will not see in any government press release or corporate mass media any mention of the European Union’s world-leading environmental protection by its Organic Agriculture Regulations setting out “the principles, aims and rules of food production and labelling”. No-one mentions in the media or government that these regulations are precisely what are eliminated from monitoring, feedback and enforcement in Britain once the Great Repeal Act is legitimated by the June 8 election.   In similar vein, there is a white-out of pre-and-post-Brexit reference to EU’s historic and definitive Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH). It is by far the most advanced environmental and human health protection system scientifically validated in existing government and the world. But it too is made invisible in the ruling discussions and debates. Such jam-it-through strategy with no public understanding and almost all the primary life-protective common legislation effectively concealed has been shrouded throughout in the pervasive media image of PM May vs. hapless Corbyn Labour. This is the only issue raised for voters in the June 8 election. The global media too have consciously or unconsciously collaborated in making this most important election in British history in financial and environmental terms, a non-issue. Yet even all this has not been enough for the great cover-up still in motion. There has been a Lobbying Act to stop informed NGO’s – but not any of the London-based big transnational banks and corporations – from lobbying before the June 8 election, a new law which has frightened them into silence with Greenpeace already convicted and fined.

 

 

What Does Not Fit the Life-Blind Program?

One underlying principle governs beneath the political scenes, speeches and choral commentaries on stage. It also governs the UK-US ‘special relationship’ and Wall Street-London axis at the same time, in different ways: De-fund and de-regulate all life-protective laws, agencies and enforcements that cost public and corporate money, and subsidize instead the unproductive or counter-productive private money party’s multiplying growth.

The method is the same at base. Private Wall-Street and London banks behind the scenes print the world’s money by debt issue for maximum profit to the top while producing nothing but multiplying their private money demand over all that exists.   Transnational corporate money sequences funded by the banks, in turn, strip and pollute life bases on all levels to produce and sell profit ever more commodities priced for maximum private profit with few or no life standards to govern their extractions, productive processes, products, wastes and life-destructive externalities. For all its faults, the European Union has gone much further than any other unified jurisdiction in human and ecological regulations of these material phases, and the financial drivers behind them. This is ultimately why the UK private money party, especially its non-productive and counter-productive investors, have repudiated EU regulations of them on other pretexts. In general, the connected global forces of life and life means destruction are screened out by the established framework of meaning which is in principle life-blind. In consequence, private financial and corporate forces are released from what modest public regulation has developed to protect organic, social and ecological life systems, and the systemic despoliation of global life-organisation continues to run down biodiverse energy capacities on all levels. The UN Paris Agreement on ‘climate change’ is intended to meet the most dangerous consequences of this system. But it is selective, and ‘climate change’ euphemises hydrological-cycle destabilization and pollution that is the baseline force of world life and life means destruction. Again unifying principles and concepts are screened out of public discussion as well as silo disciplines.

Jeremy Corbyn’s back-to-the basics Labour movement is hopeful in that it is not bound like Tony Blair’s ‘New Labour’ to the dominant Murdoch media and big corporations controlling the agenda via government committees and PFI’s.  And this is why Corbyn’s grass-roots leadership is pervasively belittled in the dominant media, and also why the while historic stakes of the June 8 election have been systematically blinkered out. The ruling framework of meaning presupposes the life-blind system, rules out what does not conform to its money-value logic, and attacks what seeks to reform it. So as the stakes keep getting higher as June 8 approaches, they are kept out of the discussion. There has been a systemic blocking out of all the momentous issues in the campaign before ‘Brexit’ and after it to today. The meta program is mind-locked, and compulsively proceeds even when its political leaders have no legitimate ground to proceed, but only a transient minority vote for Leave the EU in a largely apathetic and cynical referendum with no binding force. The Great Repeal Act of  EU regulations follows in lockstep fulfilment of the meta program, and an unscheduled snap election while Tory polls are still far ahead is set to cement it all in before the public wakes up to the meaning. Thus proceeds the greatest system-wide reverse and financial boondoggle in modern English-speaking economic history and social-ecological evolution.

 

 

There is No Alternative

The re-grounded Labour movement does the best it can for the working people and dispossessed across Great Britain, the only organised institution to do so in the country. But this too is ridiculed and condescended to in the corporate press. And still the deeper and historic issues remain completely out of view. In recent days, nonetheless, Labour has stood for returning the looted national railway system and other privatized utilities to a productive public direction, for taxing the rich more to fund falling public services, and for connecting Britain’s terrorist problem to its armed-force actions in other countries.  This has given a spike in the polls to Corbyn labour. Yet still the profound major issues of ‘Brexit’ itself remain covered over. The dots of the essentially phoney Leave the EU referendum are not yet joined. The holus-bolus financial and environmental deregulation by the Brexit scheme remains undefined. The basic outline for the historic hoax has remained undetected into June. “There is no alternative” has thus been reconstituted into the 2017 election. The underlying driver to cement the unaccountable private money power demanding ever more into a de-regulation bonanza remains unnamed. Not even the master slogan of ‘Brexit’ is deconstructed as a public relations mask of the greatest backward move in life-protective norms in historical record: all to serve life-means destroying or unproductive money-party powers that are fronted by photogenic leaders on all planes. The rationally self-maximizing growth of private-profit power over all existing assets is built into the meta program. But it is not comprehended. It exactly follows the inner logic of ruling economic, military and strategic game theory in models and calculations, but there is no linking across the simultaneous phenomena which are life blindly forming the future. The conversion of organic, social and ecological life organisation into more money demand for fewer is now being rapidly instituted into place.

 

 

Summary

The June 8 British election is set to lock in the big-money coup against long- evolved regulations and norms protecting human, social and environmental life.  The crisis is incomprehension of the meaning. A corrosive cynicism of EU capacity to govern for the public interest (Greece the continuous demonstration), media-debased public perceptions suppressing the historic stakes involved, a US presidency demonized in all the corporate media,  NATO-supported Nazism in Ukraine as Western freedom, and other degenerate trends have not been connected in their unifying pattern – within which UK money-party reversal of post-War socio-economic evolution is taking place. PM Theresa May is the political face of the great leap backwards.  So far the ruling politics of one distracting spectacle after another has worked right up to the June 8 election, fortified by a diabolical terrorist attack on London 5 days before the vote. y.. Yet there is a growing intuition of the fast slippage of social and ecological life order into chaos with no human centre of gravity in charge.  The British public may still see through to the underlying radical program of government de-regulation, de-taxation, and de-funding to further empower the financial looting and life-despoiling forces at work. Joining the dots behind the scenes reveals the emerging plot of meaning. The Great Brexit:

(1) stops the EU Central Bank Regulators and Supervisors from finally checking out the models, risk culture methods, inadequate reserves and so on of big London banks involved including Goldman-Sachs in the 2007-8 financial collapse, and

(2) eliminates the binding force of all the long-evolved and scientific EU regulations structured to prevent, in particular, the corporate industrial food system’s polluting and despoiling US-led methods undermining the British people’s health and environment.  

Brexit’s Great Repeal Act and PM May’s snap June election is the only way to achieve (1) and (2) without negotiation or exposing public issue. London financial accountability has most of all been silenced as an issue. Its growing trillions of nano-second fast-dealing to enrich the already rich by unregulated methods and calculations remain immune from any independent oversight. Similarly, the very aims and principles of the binding, monitored and still developing Organic Agriculture Directive are anathema to Britain’s US-led Big Agriculture and Food lobbies, not only around GMO restrictions – which US trade authorities and British GMO ‘science’ have made war on for over 15 years – but around every EU restriction on pesticides and herbicides to clear-cutting environments for monocultural factory methods to commodity motor rackets and pollutions to norms of licensed “food quality” in the corporate market. The very governing EU objectives of “biodiversity”, “animal protection”, and “organic natural systems and cycles” are a threat to Big Food production and products when attached to exactly defined, inspected and enforceable life standards. Long used to pervasive public relations sales pitches of “feeding the world” in place of accountable, life-protective environmental and nutrition standards, this very powerful British lobby is next to London Big Finance as the covertly moving major profit-first force behind the Brexit coup d’etat. Both are in principle life-blind in their mechanical financial models. Both are governed only by self-maximizing private money sequencing in exponential growth with no life-coherent ground or norms to stop their march across the world through organic, social and ecological life hosts. Both have led the Great Repeal of developed EU life standards beneath the radar of media coverage, parliamentary diagnosis, and academic silos. The June 8 2017 UK general election will open or close Britain’s life future under the rule of life-protective law.

The Icesave Dispute: A Case Study into the Crisis of Diplomacy during the Credit Crunch

Introduction* 

The legal and political dispute Iceland fought with the UK and Dutch governments over responsibilities of deposits in the fallen cross-border Icesave Bank in wake of the international financial crisis – which hit Iceland severely hard in autumn 2008 when its three oversized international banks fell – not only revealed inhered weakness of the European financial system but also led to profound crisis of diplomacy during the Credit Crunch. The legal ambiguity of responsibilities was testing understandings and interpretations of international law in cross-border finance. Not fitting squarely within EU- diplomatic- or financial law it can be argued that the case in its process illustrates contested and hybrid construction of legality as here is explored. Rajkovic et al, (2016) understand international legality as interrelated processes of social and interpretive contestation in the construction of what is understood as (legal) rule in the world. In this regard the Icesave dispute illustrates how larger and more powerful countries were politically able to pressure a much smaller state in time of crisis into abiding to their own interpretation of law and in doing so rallying behind them support of international organizations like the EU and the IMF.

The Icesave dispute was thus not only a matter of international law, but rather also a case of contestation between cross border actors over determination of authority during the crisis. By empirically studying the Icesave dispute this paper discusses a profound crisis of diplomacy and the political processes of international legality of the financial sector during the Credit Crunch. This can be coined as case of perfect legal storm in international relations; a crisis of public international law, diplomatic law, EU law and finance law. This case study traces the dynamics of how international legality is produced and remade during the course of this particular inter-state crisis and in doing so thus contributes to analysis of political construction of international legality.

The study deals with interpretive contest in international relations on what is considered legal, in this particular instance dispute of responsibility over guarantying deposits of a fallen cross border bank. In this case intersecting practices and expertise were to revolve in a struggle over cross border insolvency law. By pressuring the Icelandic government into accepting responsibility of the fallen bank in UK and the Netherlands this was an international push towards sovereign socialization of private debt through twists of circumstances and practise.

At its core, perhaps, this is a study of struggle over who decides authoritative interpretations, of what in this particular instance is understood as international legality, which is constructed, construed and contested through multi-actor and multi-level interaction of multi-national relations.

The Crisis

Iceland was the first victim of the of the global Credit Crunch when its three international banks came tumbling down in October 2008, amounting to one of the world’s greatest national financial crises. This was a financial tsunami without precedent. Glitnir Bank was the first to run into trouble when planned nationalization was announced on 29. September 2008. On the basis of emergency laws rushed through Parliament, Landsbanki was taken into administration On October 7th. The following day then British Prime Minister Gordon Brown invoked the UK Anti-Terrorism, Crime and Security Act 2001 (passed after ‘9/11’ in 2001) to freeze all Icelandic assets in the UK. Operating with little information and in a climate of confusion this was, he argued, to protect UK depositors in the bank. That act served as the final blow to Iceland’s last and largest bank still standing, Kaupthing. The vastly oversized Icelandic financial system was wiped out. Iceland is one of the smallest countries in the world and borders on being a microstate with just over 300,000 inhabitants. However, this experience ranks third in the history of the world’s greatest bankruptcies (Halldórsson & Zoega, 2010). Iceland also responded significantly differently to the troubles than most other states, allowing its financial system to default rather than throwing good money after bad.

Iceland had few good options. The IMF would not consider Iceland’s loan application until the dispute with the UK and Dutch governments over the Icesave deposits accounts was settled. The fallen Landsbanki had set up these deposit accounts in those countries, leaving many of their citizens without access to their money. Even though the Icelandic government steadfastly argued that it wasn’t legally at fault and that the state would fulfil all its legal obligations regarding Icesave, the IMF wouldn’t budge. Iceland was being pressured by the UK and Dutch governments, which were backed by the whole EU apparatus.

This was a staring contest Iceland could not afford to drag out as the state was running out of foreign currency. Early agreements in October and November 2008, first so-called Memorandum of Understanding with the Dutch government and then a more broad based Brussels Guidelines, which included EU involvement, were signed by Icelandic ministers in order for the IMF to be allowed to be brought in to stabilize the economy, not least through the introduction of capital controls and the co-funding of a loan package with the Nordic and Polish governments. By mid 2009, after change in government, these early agreements were abandoned for bilateral agreements with the finance ministries of the Netherlands and the UK, where Iceland accepted responsibilities for deposits of the fallen bank. In an extraordinary move the President, however, refused to sign the bills, referring them to referendums, in which they were rejected by large majority, spurring one of the greatest international disputes Iceland had ever fought.

Not only was Iceland denied any access to united efforts within Europe to bailout banks but the UK and the Netherlands were able use their position within the EU to pressure Iceland to accept their own interpretation of EU laws Iceland was to follow. Though ambiguity still remained as to who was legally liable for the loss, the UK government was using all means available to pressure Iceland to accept responsibility, as is documented later in this paper.

On 28 January 2013, the EFTA Court finally ruled on the case, concluding that no state guaranties were in place on the deposits and, thus, dismissing the claim of the British and Dutch authorities (Judgment of the Court, 2013). The ruling vindicated the Icelandic state of any wrongdoing. In early 2014 the Dutch and the Brits filed claim against only the privately held Icelandic Depositors Guaranty Fund before the District Court of Reykjavik.

A Systemic Flaw

The collapse of the Icelandic banks clearly revealed a serious weakness in the European banking passport system, a macroeconomic imbalance within the Single European Market. It was a weakness that some of the more established banking nations had warned against when the system was being constructed (for more, see Benediktsdottir, Danielsson, & Zoega, 2011). The main flaw lay in the fragmented nature of supervision on an otherwise common market – European-wide regulation but only state level supervision resulting in a tapestry of schemes and insurance levels across the EU. This had caused a mismatch between access to market and adequate supervision.

There was also an inhered flaw in the setup of Iceland’s link to the EU through the EEA agreement. Being in the Single European Market through the European Economic Area agreement (EEA) but outside the fence of EU institutions left Iceland without shelter when the crisis hit. This neither-in-nor-out arrangement – with one foot in the Single European Market, with all the obligations that entailed, and the other foot outside the EU institutions, and therefore without access to back-up from, for example, the European Central Bank – proved to be flawed when the country was faced with a crisis of this magnitude: The oversized Icelandic banks were operating in a market that included 500 million people but with a currency and a Central Bank that was backed up by only roughly 330,000 inhabitants. As a participant in the EU Single Market, Iceland was inside the European passport system so the banks were able to operate almost like domestic entities throughout the continent.

Landsbanki had in 2002 acquired the British Heritable Bank and in 2005 furthermore opened a separate subsidiary in London. However, when marketing the Icesave deposit accounts in October 2006 Landsbanki decided to bypass both and instead opened a branch from the Icelandic Landsbanki collecting the deposits. This was done to be able to transfer the money upstream to the mother company in Iceland (SIC 2010, Vol. 6, Ch. 18: 8), something the subsidiary system does not allow. Furthermore, branches were under general surveillance in the home country of the parent bank, while subsidiaries were subject to such monitoring in the host country. However, according to this setup, liquidity surveillance should have been in the hands of the British FSA, which also had authority to intervene in marketing of the deposit scheme in the UK. Interestingly, however, when setting up the accounts, Landsbanki had negotiated exemption from the FSA liquidity surveillance until 2011 – liquidity surveillance of Icesave was thus only in the hands of the mother company in Iceland.

At the time no one seemed to even contemplate the risk involved. Without any objections from either Icelandic or UK authorities, the bank quoted the EU/EEA Directive 94/19/EC on Depositors Guarantee Schemes, they insisted was in place in Iceland, which, they said, would protect all deposits up to €20,887. Then they referred to the British top up guaranty for the rest – British authorities were by then promising to cover up to 50.000 Pounds per account. This was however always very ambiguous.

Kaupthing opened a similar high-yielding Internet deposits scheme, named Kaupthing Edge. However, unlike Landsbanki with Icesave, Kaupthing used its subsidiary, Kaupthing Singer & Friedlander, to host the deposits. Edge deposits therefore had to be kept in the UK and were under British banking regime surveillance. At the time, few noticed the difference, which after The Crash left those involved in the two cases a world apart.

Playing on an Icelandic symbol, Icesave was marketed to tap into the trust associated with Nordic economies. Soon attracting the favourable attention of the financial media, the scheme became an instant success. The Sunday Times, for example, wrote enthusiastically about the scheme under the headline: ‘Icesave looks like a hot deal’ (Hussain, 2006). Before the end, Icesave had attracted almost as many savers as there were inhabitants in Iceland. Landsbanki had for a while enjoyed better ratings than the other two because it was able to tap into the Icesave deposits to keep liquidity flowing. This was, however, a mixed blessing, as reliance on deposits leaves a bank much more vulnerable to bad news than if it is funded in the wholesale market. Even a minor issue can result in a run on a bank with avalanche of withdrawals if it is portrayed in the wrong light. Still, all three banks were passing the Icelandic Financial Supervisory Authorities (FME) stress tests with flying colours. In theory, the banks were all doing well. Amongst those buying this story was the Financial Times, which as late as August 2008 wrote that ‘fears of a systemic financial crisis in Iceland have dissipated after the country’s three main banks announced second-quarter results showing that they are suffering amid the downturn – but not too badly’ (Ibson, 2008).

The Central Bank stretched itself to the limit to keep the banks liquid in domestic króna, for example accepting their own bonds as collateral – the so-called love letters. However, to back up the overinflated banking system in such dire straits it needed a sizable sum in foreign currency. The Central Bank thus went knocking on doors in the neighbouring countries asking to open similar swap lines as others were negotiating, that could be drawn on in time of need. This was meant to boost confidence in Iceland’s capacity to back up the financial system. To the surprise of the government, however, apart from earlier limited swap-lines with the Nordics, Iceland met with closed doors in most places. This was at a time when the neighbouring states were still upholding much more extensive currency swapping agreements.

Not only had the banks been pushed out of the international capital market, but the government had as well. For the international financial system tiny Iceland was as a state not thought to be too big to fail. Iceland first approached the Bank of England in March 2008 for a swap-line agreement. Initially, the request was positively received, but with a suggestion that the IMF would analyse the need. A month later, the climate had changed. It had become clear that the central banks of Europe, the US and the UK had collectively decided not to assist Iceland. Later it became known that the governor of the Bank of England, Mervin King, offered instead to co-ordinate a multinational effort to help scale down our financial system. His offer was instantly turned down by the leading governor of the Icelandic Central Bank, Mr. Davíð Oddsson (See for example, Wade & Sigurgeirsdottir, 2010.

UK Concerns

When Northern Rock was running into trouble in late 2007 and taken into receivership in February 2008 worries over further volatility in the banking system were spreading in the UK, raising concerns of health of many other banks. By 2008 Landsbanki had collected around 4 billion pounds through the Icesave scheme. With the International Financial Crisis now blazing and the apparent wide exposure of Iceland’s oversized banking system this was causing increasing concerns in the UK, especially because of the poor state of the Icelandic Depositors Guaranty Fund holding only around 1 per cent of the liabilities of the Icelandic banks now facing headwind (Jónsson, 2009). This caused an avalanche of negative reporting in the UK media on the Icelandic banks. On 5th February 2008 The Daily Telegraph for example asked in a headline: “Is Iceland headed for meltdown?”(“Is Iceland headed for meltdown?,” 2008). Subsequently increased withdrawals were almost amounting to a run on the bank, which the bank was barely able to withstand, before deposits started picking up again in April.

These events lead the British FSA to push for restructuring of the online branch, for example proposing revoking an exemption Icesave had negotiated from liquidity surveillance in the UK. This was raised in meetings between governors of the Icelandic Central Bank and the Bank of England on 3d March 2008 and again in meeting the FSA had with Landsbanki management on 14th March 2008. In these meetings the FSA furthermore proposed moving the deposits to Landsbanki’s Heritable subsidiary and thus entirely under jurisdiction of the British Financial Services Compensation Scheme  (SIC 2010, Vol. 6, Ch. 18: 12, 13). For this, however, demands were made that assets had to follow from the parent bank in Iceland to the UK, which Landsbanki had trouble meeting (Ibid). The liability amounted to half Iceland’s GDP. Additionally such transfer would have to be with depositors consent, though force majeure situation might justify a quicker move. This was the start of increased tension between Iceland and the UK over the Icesave deposits, ultimately resulting in the UK authorities seizing the bank in October 2008 when the parent bank was falling in Iceland.

The tension was heightening in frequent exchange of letters over the coming weeks and months. In a letter dated 29th May 2008 the FSA finally revoked the exemption from UK liquidity surveillance and subsequently demanded that the Icesave deposits be moved to subsidiary (SIC 2010, Vol. 6, Ch. 18: 16). The FSA had concerns that neither the Icelandic Guaranty Fund nor the Central Bank had ability to back up the bank in times of crisis. The FSA also asked that the Icesave deposits would be capped at 5 billion pounds level which they were now reaching close to and that interests would be set below featuring on best buy tables (SIC 2010, Vol. 6, Ch. 18: 17). Landsbanki replied on 15th July 2008 agreeing with the general aim of moving the deposits to subsidiary but refusing both capping the deposits and the request of setting interest below best buy level. In the meantime the issue had been reported widely in the UK, for example discussed in the House of Commons were MPs quoted report in The Times on 5th July stating that collectively the deposits of the Icelandic banks in the UK were amounting to 13,6 Pounds or “twice the country’s entire GDP”  (SIC 2010, Vol. 6, Ch. 18: 19).

On July 22nd 2008 the FSA wrote back saying that Landsbanki’s reply was worrying, that risk of run on the bank was increasing and that the FSA would be forced to consider applying its legal measures against the bank if its requests were not being met. That is; a solid cap, solid liquidity buffer and firm time tabled intention of subsidiarisation. (SIC 2010, Vol. 6, Ch. 18: 19). Though Landsbanki voiced willingness to comply in its letter to the FSA on 28th July it also explained why it might have difficulties in implementing what was being requested unless the FSA would agree on flexibility regarding some of its conditions in the transition period. On these conditions Landsbanki and the FSA were never able to agree on. While the FSA was operating in order to protect UK based depositors the Landsbanki management was rather concerned with saving the mother bank in Iceland. These aims proved contradictory and caused prolonged frictions (see SIC 2010, Vol 6.).

The FSA was not only applying its pressure in letters and meetings with Landsbanki but also in ongoing correspondence with the Icelandic FME and Central Bank. In a letter to Landbanki on August 5th 2008 the British FSA demanded Landsbanki to confirm within a week how the bank would comply with conditions set by the FSA in order to move the Icesave deposits to its subsidiary in London, otherwise it might be forced to apply its formal legal measures (SIC 2010, Vol. 6, Ch. 18: 23). This was the second time the FSA threatened in a letter to directly intervene in the bank’s operations.

The Icelandic Central Bank was now directly involved. Reportedly it considered openly defying the FSA but decided against that approach as it might risk the stability of the entire Icelandic financial system (SIC 2010, Vol 6). On 11th August 2008 the Icelandic FME wrote back to the FSA pleading on behalf of Landsbanki for flexibility while transferring Icesave to the Heritable Bank in London. The two surveillance authorities talked in a teleconference a week later where the FSA suggested that Landsbanki might sell Icesave. In the meantime, the FSA had written Landsbanki once more on 15th August 2008, demanding increasing reserves to 20 per cent of deposits. At the end of the letter the FSA threatened for the third time that it might apply its formal authoritative legal measures against the bank and stop deposit collection into Icesave accounts (SIC 2010, Vol. 6, Ch. 18: 25). The Icelandic actors, that is, the Landsbanki, the Icelandic FME and the Central Bank however believed that would only trigger liquidity crisis – not only for Landsbanki but for all Icelandic banks and indeed also the UK fragile banking system (SIC 2010, Vol 6).

It was now clear that the British FSA considered Landsbanki being in non-compliance with its conditions and that it was already failing. The Landsbanki management pleaded with the Icelandic Minister of Commerce to intervene, who with a team of officials met with UK Chancellor of the Exchequer Alistair Darling in London on 2nd September 2008. Mr. Darling has since reported that he was disappointed with the Icelanders as he felt they did not appreciate the seriousness of the situation (SIC 2010, Vol. 6, Ch. 18: 31, 229). Following up on the meeting few days later, leading official in the British Treasury dealing with the Icelandic case, Clive Maxwell, called the Icelandic Ambassador in London, expressing the Chancellors concerns and explaining how politically difficult the relationship with Iceland had become in the UK. This was perhaps a warning that tougher measure might be taken against Iceland.

In a letter on 3d September 2008 the FSA once again wrote to Landsbanki saying it was considering applying its formal legal measures if the bank would not before 8th September 2008 explain how it would comply with the conditions. Before the deadline Landsbanki replied by again voicing willingness to comply but explaining why it might be difficult to meet all the requests. In wake of several subsequent meetings and correspondence between agencies in the two countries the FSA wrote back on 17th August 2008 announcing that it would apply its legal measures. It was now ordering the bank to fully comply with bringing assets to the UK to underpin withdrawals from Icesave accounts and in order for them being transferred into the British financial space (SIC 2010, Vol. 6, Ch. 18: 33). The state of the international financial system had by then gone from bad to worse when Lehman Brothers collapsed in the US on 15th September 2008.

In a desperate reply on 19th September 2008 Landsbanki indicated that it would comply before turning straight to the Icelandic FME asking for help. The two surveillance authorities were still in correspondence on the issue when further trouble arose for the Icelandic banks, which I turn to next.

Heightening Pressure

When a planned nationalization of one of the three banks, Glitnir, was announced in Reykjavik on Monday September 29th depositors were flocking to nearest branch and withdrawing their savings. When the news travelled abroad, many of the 300,000 Icesave depositors in the UK, also rushed online to withdraw their money from the Icesave accounts. Throughout the continent, central banks and governments were harmonizing their response to the crisis. The ECB and the Bank of England, for example, were providing massive liquidity to European banks, but despite a wide-ranging emergency plea, Iceland would not be allowed access to these funds. The same was also to become true in Washington. Iceland was flatly refused as neighbouring governments collectively opposed a bailout, referring it instead to the IMF. Being the first Western country in four decades to surrender to the IMF was seen as a humiliation and a defeat for the Icelandic postcolonial project (see Bergmann 2014b).

In the UK, worries over the poor state of the Icelandic banks had been growing for some time. Since May, unsuccessful negotiations had been under way to move the Icesave deposits to Landsbanki’s Heritable Bank and thus under the cover of the UK banking scheme. On Friday 3d October the FSA formally announced applying its legal measures against Landsbanki stipulated in the Financial Services and Markets Act 2000 (FSMA). The bank was already by Monday to install funds amounting 20 per cent of the Icesave deposits into the Bank of England, lower free access deposits to below 1 billion pounds by end of 2008 and cap total deposits at below 5 billion pounds (SIC 2010, Vol 6). The bank was also to bring its interest below best buy levels and halt all marketing of free access deposits. As Landsbanki did not at the time have funding available to comply this was in effect equal to killing of the bank.

In the evening Alistair Darling called his counterpart raising concerns that 600 million pounds were illegally being moved out of Kaupthing and back to Iceland. To this the Icelandic authorities had no answer. By close of market the same day The European Central Bank had placed a margin call of 400 million Euros on Landsbanki in Luxembourg, threatening to seize many of its assets. However, on Sunday evening the ESB revoked the call and by doing so releasing some of the tension (SIC 2010, Vol 6).

Thus, while Iceland was desperately trotting the globe shopping for money, the UK authorities and the ECB were not only refusing any funding but indeed pressing it for cash. The firm stand of the Bank of England, the ECB and the US Federal Reserve against Iceland also made the Scandinavian neighbours hesitant to help further (SIC 2010, Vol 6). To stem the bleeding of the Edge and Icesave accounts, both Kaupthing and Landsbanki were frantically selling off assets at rock bottom prices. With the rapidly increasing flow of negative reporting abroad, the run on Icesave in the UK grew stronger. On Saturday 4th October, depositors could no longer access their accounts online. On the website an explanatory note read that this was because of technical problems. Traffic had increased more than fivefold. Really, however, this was not least because the bank was already exhausted by the run; it could no longer honour the withdrawals. Out of the £4.7 billion the 300,000 or so depositors held, more than £300 million ran off the accounts on that day alone. Foreign reporters and government authorities responded by asking whether Iceland would provide the same protection to foreign depositors as it had already announced for domestic ones. Pressure rose when the government struggled to find a diplomatic answer (Jóhannesson, 2014).

Around dinnertime on Sunday 5th October British PM Gordon Brown called his Icelandic counterpart Geir Haarde, urging him to seek IMF assistance. They were old acquaintances, since both had served for years as finance ministers, meeting on several occasions. Brown also voiced concern that money amounting to more than one-and-a-half billion pounds was unlawfully being brought over to Reykjavik out of Kaupthing’s London subsidiary, Singer & Friedlander, which would not be tolerated. The amount had thus grown by billion pounds in only couple of days since the call from Darling (see SIC 2010, Vol 7).

This claim of illegal money transferring out of the UK, which was repeated by many UK officials over these dramatic days, later proved unfounded as was for example stated in report to the House of Commons Treasury committee (2009, April). The UK was in this regard already burned by Lehman Brothers, which prior to its default had sneaked back to the US eight billion dollars from the City of London, and would not allow the same thing to happen again. The call ended without a solution, with Brown all but begging Haarde to call in the IMF rescue team. The message from the UK side in frequent correspondence over the weekend was always the same: no bailout money would be available internationally for Iceland except through an IMF programme (SIC 2010, Vol. 6, Ch. 20: 100).

The UK authorities were threating to seize Icesave already by Monday. To halt the blow the FSA demanded 200 million pounds immediately to underpin Icesave and further 53 million to stabilize the Heritable Bank (SIC 2010, Vol. 7, Ch. 20: 145). All attempts to shift the Icesave accounts into British banking space had thus failed. Negotiations with the British FSA to allow Landsbanki to move the deposits to its London Heritable Bank and thus under the UK banking regime were stuck. The British were asking for more money alongside it than either Landsbanki or indeed the Icelandic state could possibly raise. The Icelandic Central Bank could only bailout one of the three big Icelandic banks. All of them seemed to need around 500 million Euros for only short-term rescue. When it came clear that Kaupthing would win the lottery of which to bail out, as it was deemed to have the best chance of surviving, the light was finally out on Landsbanki.

God Bless Iceland!

When the markets opened on Monday October 6th, the FME had stopped trading the banks’ stocks and the banks themselves froze all fund transactions. To counter the almost inevitable avalanche of withdrawals, the government issued a blanket protection for all deposits within the country. The UK and Netherlands were issuing top-up guarantees for deposits above the €20,887 stipulated in Directive 94/19/EC up to €40,000 in the Netherlands and, by Wednesday, up to £50,000 in the UK. Many European states were also issuing complete guarantees, including Ireland, Germany, Denmark and Austria. Iceland was, however, only guaranteeing domestic deposits but could not explicitly state what would happen in foreign branches, apart from a vague general pledge to the effect that the banks’ Depositors and Investors Guarantee Fund would be ‘supported’. That promise was always very ambiguous and, furthermore, it was always clear that it might anyway be difficult uphold, as deposits in foreign branches of Icelandic banks, most of which were on Icesave accounts, amounted to around £8.5 billion, about 80 per cent of the country’s GDP, whereas the fund held only about 1 per cent of that total amount, which, though, was comparable to other countries. The ambiguity of the statements coming out of Reykjavik was thus worrying neighbours, especially government officials in Whitehall (see Jóhannesson, 2014).

It was clear that Landsbanki would already be defaulting the following day. This was a stark reversal of the bank’s situation from just a few months before, when it seemed to be well funded with a comfortable €800 million liquidity and strong inflow of foreign deposits. Furthermore, redemption of loans was low until late 2009. And even though it was exhausted of foreign cash by the run in the UK, the bank still had enough money in Icelandic króna to survive this storm; the problem was that the króna was no longer tradable for foreign currency. This was thus a double crisis – a banking crisis and a currency crisis – starting already in March (see Bergmann, 2014).

Around noon Monday 6 the UK embassy in Reykjavik reported to London on events over the weekend. Interestingly the ambassador mentioned the Icelandic governments guaranty of domestic deposits but then indicates that the government had sent similar statement to London because of Kaupthing and Landsbankis operations in the UK (Jóhannesson, 2014). This was a misunderstanding but it seems clear that the UK government believed that such a promise had been given, that the Icelandic government would at least protect the minimum of EUR 20.887 (ibid). This proved to be a wrong interpretation of what Icelandic officials meant when stating that the Icelandic Depositors Guaranty Fund would be ‘supported’ (ibid), but given the fact that Iceland officials at the time were avoiding contact with the British and only providing them with as vague responses as possible (ibid) one can understand that there was wide room for such misunderstandings.

In the afternoon on Monday 6 October the Icesave bank was being closed in the UK by formal issue of the FSA. Around the same time PM Geir Haarde was announcing that the Icelandic state would not have the means to bail out the banks. By trying so it ran a risk of being sucked with them into an economic abyss. (Haarde, 2008). An emergency legislation was rushed through parliament, allowing the government to split the banks into a domestic only good bank surviving and bad bank taken into receivership. This method was according to advice of a financial specialist, Marc Dobler, sent from the Bank of England to Reykjavik (SIC 2010, Vol. 7, Ch. 20: 120). The legislation also altered the order of payments of claims out of the fallen banks by moving depositor’s claims to the front. This was a force majeure situation. The government simultaneously wanted to protect domestic depositors in Iceland and the state from claims from abroad. The action was part of the defensive wall being raised around ordinary households. Foreign creditors would simply have to accept losing most of what they had loaned to the Icelandic banks.

This was a time of chaos. UK authorities were desperately trying to get information out of Iceland. It didn’t help when Alistair Darling could get through to neither the Icelandic PM nor the Finance Minister, who he was asked to contact again the following morning. The UK government’s frustration was reported in correspondence throughout the evening by the UK ambassador with Sturla Sigurjónsson of the Icelandic Prime Ministry. He reported a message from London: if convincing explanations would not come out of Reykjavik, that would be negatively interpreted in London and might have serious effect on the bilateral relationship between the two countries. (SIC 2010, Vol. 7, Ch. 20: 147).

Before opening of business on Tuesday morning, a board for a new Landsbanki had been appointed. Meanwhile, in the UK, the FSA issued a moratorium on Landsbanki’s London based Heritable Bank.

With all funding opportunities closed, the situation was growing bleaker by the hour. As planned Alistair Darling called on Tuesday morning to discuss these and other grave matters with Finance Minister Árni Mathiesen. When he could not get a clear state guarantee out of his Icelandic counterpart, an assurance that UK depositors would be protected, at least up to €20,887 according to Directive 94/19/EC, he stated that this would be ‘extremely damaging to Iceland in the future’ and then ended the call saying, ‘the reputation of your country is going to be terrible’ (“Samtal Árna og Darlings,” 2008). Mathiesen could not but agree, but he understood from their conversation that he would still have some time to work things out.[1]

Invoking Anti-Terrorist Act

Seen from the UK and the Netherlands, the situation was simply that Icesave depositors were left without access to their accounts. The website was inaccessible and no trace of the bank was left in the UK or the Netherlands. No one answered the phone and there was not even an address to go to. Depositors were in an intolerable position – the bank had disappeared without a trace from the face of the earth. This caused a seriously strained relationship Reykjavik had with London and The Hague. The British and the Dutch governments decided to compensate their depositors, even beyond the €20,887 mark guaranteed by Directive 94/19/EC. For this they demanded payback with interest from the Icelandic government.

In Whitehall, preparations had been under way for dealing with the Icelandic crisis. Icelanders would not get away with simply cutting off their foreign debt, shutting the doors and leaving British citizens out in the cold. It did not help that UK officials had learned of the message from governor of Iceland’s Central Bank on TV few days earlier, in which he stated that foreigners could only expect between 5 to 15 per cent of their claims. The plan was to be kicked into action. The British claimed that giving preference to depositors in domestic banks over those in foreign branches was a breach of European regulations, which Iceland subscribed to through the EEA.

In the early morning of Wednesday 8th October 2008 Alistair Darling appeared on BBC Radio 4 claiming that the Icelandic government was reneging on its responsibility to UK depositors, and that this would not be tolerated. Referring to his conversation with Iceland’s finance minister Mathiesen the day before he said: ‘The Icelandic government, believe it or not, told me yesterday they have no intention of honouring their obligations here’ (Darling, 2008). In a joint press conference at 9:15 Darling and Gordon Brown announced a massive bailout of UK-based banks, to the tune of £500 billion. As a result of pumping the money into the banks, the British state acquired a majority stake in the Royal Bank of Scotland and steered the merger of HBOS and Lloyds TSB, in which the state had acquired third of the shares. There was, however, not a penny for Icelandic-owned banks in the UK. On the contrary, Brown claimed that Iceland’s authorities must assume responsibility for the failed banks and announced that the UK government had taken ‘legal action against the Icelandic authorities to recover the money lost to people who deposited in UK branches of its banks’ (quoted in Balakrishnan, 2008). Director of the British FSA, Hector Sants, is reported to have told the management of Kaupthing Singer and Friedlander in the UK: ‘Those funds are not for you’ (SIC 2010, Vol. 7, Ch. 20: 171).

Earlier in the morning, the UK FSA had called Kaupthing demanding £300 million instantly be moved from Reykjavik to Singer & Friedlander to meet the run on Edge accounts, which with the Icesave website down also was blazing, and then a further £2 billion over ten days. This was an impossible demand for Kaupthing to meet, and it instead called the Deutsche Bank, asking it to sell off Kaupthing’s operations in the UK. Deutsche’s brokers thought that could be done within 24 hours (Jónsson, 2009).

The legal actions Brown had mentioned in his press brief, however, went much further. At 10:10 in the morning, deposits in Landsbanki’s Heritable Bank were moved to the Dutch internet bank ING Direct for free when the ‘Landsbanki Freezing Order 2008’ took effect (The Landsbanki Freezing Order 2008, 2008). The action was based on the Anti-Terrorism, Crime and Security Act, which had been put in place after the terrorist attacks in the US on 11 September 2001. Not minding that around a hundred thousand people worked for Icelandic-held companies in Britain, the UK government invoked the Anti-Terrorism Act to freeze the assets of Landsbanki in the UK and for a while also all assets of the Icelandic state including the Icelandic government, the Icelandic Financial Surveillance Authority and the Icelandic Central Bank (SIC 2010, Vol. 6, Ch. 18: 40).

Later that day the FSA took control of the Heritable Bank and Landsbanki’s subsidiary in London. The Landsbanki Freezing Order was issued with an explanation reading:

The Icelandic authorities have announced that Landsbanki has been placed into receivership but has not given any indication as to how overseas creditors will be dealt with. The Icelandic Government has also announced a guarantee of all depositors in Icelandic branches. However, overseas depositors have not been covered by the guarantee. This exclusion on grounds of nationality is discriminatory and unlawful under the rules governing the European Economic Area. The UK government is taking action to ensure that Landsbanki assets are not transferred from the UK until the position of UK creditors becomes clearer. The UK authorities are seeking to work constructively with the Icelandic authorities to ensure speedy resolution.

Subsequently, Landsbanki and for a while also Iceland’s Central Bank and Ministry of Finance was listed on the Treasuries home page alongside other sanctioned terrorist regimes, including Al-Qaeda, the Taliban, Burma, Zimbabwe and North Korea.

While Kaupthing’s CEO, Sigurður Einarsson, was in his London office in the late morning discussing with Deutsche Bank over the phone the fastest way to liquidate its assets, he read a banner running on the TV screen saying that the FSA had already moved Kaupthing’s Edge accounts to ING Direct in the Netherlands. Their phone conversation quickly ended, as there was no longer anything to talk about. In the afternoon, the UK authorities issued a moratorium on Singer & Friedlander, showed its Icelandic CEO, Ármann Thorvaldsson, the door and sealed the offices (Thorvaldsson, 2009). This instantly prompted a flow of margin calls and a further run on the mother company. When the dark set in, Kaupthing Bank was itself taken into administration in Reykjavik. Thirty thousand shareholders lost all their investment. Interestingly, both the previously mentioned report to the House of Commons Treasury committee (2009, April) and also the British FSA later found out that no money had illegally been moved from Singer & Friedlander to Iceland (Júlíusson, 2009), which, however, had been one of the main justifications for the UK’s attack on Iceland.

On this same day, Thursday 9th October, Brown told BBC that the actions of the Icelandic government were effectively illegal and completely unacceptable. ‘They have failed not only the people of Iceland; they have failed people in Britain’ he said. Then he said his government was ‘freezing the assets of Icelandic companies in the United Kingdom where we can. We will take further action against the Icelandic authorities wherever that is necessary to recover money’ (quoted in “Brown condems,” 2008). Later that day, Brown told Sky News that Iceland, as a state, was bankrupt and that the ‘responsibility lies fairly and squarely with the Icelandic authorities, and they have a duty in my view to meet the obligations that they owe to citizens who have invested from Britain in Icelandic banks’ (“Brown Blasts Iceland Over Banks,” 2008). Iceland was being completely rebuffed. In fact, in the coming days Brown’s rhetoric against Iceland was only to harden.

With UK depositors holding a stake of £700 million in Icesave, including many charities’ funding, Brown stated that the Icelandic authorities were now responsible for the deposits. Even in the UK, many were stunned by Brown’s harsh response to the Icelandic crisis. Many claimed that by attacking Iceland, a foreign actor, Brown was attempting to divert attention from difficulties at home, perhaps much as Margaret Thatcher had done during the Falklands crisis (Murphy, 2008). Initially it did indeed work. On its front page the Daily Mail declared ‘Cold War’ (2008) on Iceland and the Daily Telegraph screamed across its front page: ‘Give us our money back’ (2008). And these were papers that did not even support Brown or his Labour Party.

With access to the estimated 7 billion pounds the Icelandic government and banks held in assets in the UK no longer being available, the wall finally came tumbling down. Invoking Anti-Terrorist legislation against a neighbouring state and fellow NATO and EEA member was virtually an act of war, as is indicated in the interviews conducted for this paper. This was an unprecedented move against a friendly state, which cost Iceland dearly, in both economic and political terms. Moody’s instantly downgraded Iceland by three full points, to A1. Money transactions to Iceland were stopped not only in the UK but as a result also widely in Europe, where many banks refused to trade with Iceland after it had been listed in the UK with terrorist actors. The payment and clearing system for foreign goods collapsed. In only two days, all trading in króna had ceased outside Iceland’s borders (SIC 2010, Vol. 7).

By Thursday 9 October 2008, almost the entire Icelandic financial system had collapsed in a dramatic chain of events, which later became known simply as The Crash. Ironically, this was a full week before Glitnir’s 15 October deadline – which had started the whole thing.

Explaining the UK Attack

In hindsight it seems clear that the UK authorities went in their actions much further than needed in protecting British interests. Invoking the Anti Terrorist Act was for example in stark contrast to responses elsewhere. Authorities in the Netherlands, for example, saw no reason to freeze assets and in Stockholm the Swedish Central Bank was still trading with Kaupthing’s Swedish branch. In this segment I attempt explaining some of the reasons behind the harsh response of the UK government against Iceland.

First thing to note is that this was a time of utter chaos, frustration and widespread political as well as economical upheaval. Perhaps part of the reason can be found in the fact that Iceland’s economic fragility turned the mirror on the UK and its own volatile financial situation. Economist Willem Buiter (2008) who had studied the state of the economy in both countries, saw the similarity and wrote that it was no great exaggeration to also describe the UK as a huge hedge fund.

From private off-the-record interviews I conducted for this paper in late 2013 and early 2014 with several leading UK officials, within for example the UK Treasury, Foreign Office and the Labour Party, who were at the heart of these events at the time, it seems clear that the UK government finally lost faith in not only the Icelandic banks but also the Icelandic government over the weekend from Friday 3d to Sunday 5th October, 2008. This conclusion is for example also supported in unpublished report Icelandic stakeholders commissioned a leading business investigation firm in London to conduct into the issue.[2] The report states that the UK government believed until October 3d 2008 that a ‘high level political deal’ was in place of fast-tracking Icesave deposits to British banking space. The alleged deal included stipulation of insurance premium to be paid by the Icelandic government, that the ‘Icelandic government [was] to transfer 200 million pounds to the UK’.

How the UK authorities came to believe this deal was in place is not clear as no such understanding is sheared amongst Icelandic officials at the forefront of these events at the time, who also were interviewed off the record for this paper in late 2013 and early 2014. Neither are there any public documents available to support such alleged ‘deal’ at ‘high political level’ as the report claims.

UK officials interviewed for this paper point out that this was a time of great uncertainty and misinformation. Long lasting still ongoing tension at the time between the British Foreign Office (FCO) and the Treasury had weakened British institutions. Under Gordon Browns premiership it is reported that the Treasury was leading all actions against Iceland and that the FCO was hardly involved. Still, the little information that was available on Icelandic politics within the UK government was kept at the FCO. It is furthermore reported in the interviews I conducted that there was a serious communication malfunction between the Treasury, the FSA and the Bank of England. This was unfortunate as reliable intelligence on the Icelandic banks was rather within FSA and the Bank of England than in the Treasury.

In addition to not understanding Iceland, the Treasury was overworked by challenges of the international financial crisis blazing at the time. It is furthermore reported that as relatively young and small ministry in the UK the Treasury was suffering from high staff turnover and thus lack of institutional memory. All of this combined meant that when dealing with little Iceland the Treasury neither had the means nor knowledge to properly contemplate the highly complex situation.

My interviewees concur in saying that when trouble arose Iceland was thus not in focus in the Treasury, in fact it was rather viewed as troubling black hole preventing the UK from dealing with the big picture. Unlike the Foreign Service the Treasury had no room to contemplate political implications cross borders, in dealing with Iceland this was just a financial issue like all others. ‘This was just nuts and bolts finance’ said one of this papers interviewees. While desk officers were of course analysing Icelandic banks like all others, higher-level officials were ignorant about the country.

One interviewee for this paper, senior official in the British Foreign Service said that this was in effect a failure of diplomacy. He said that on both sides there existed surprising lack of understanding between the two governments, that the Icelanders did not know British governance and the UK side was almost utterly ignorant about Iceland. He pointed out that even though Gordon Brown and Geir Haarde were on good terms and for example met at Number 10 after Brown took office, that friendship did not amount to much at time of crisis. ‘To think so was foolish’, he said.

Plan A and Plan B

British officials interviewed for this paper pointed out that repeated references in FSA letters to Landsbanki to its legal authority to interfere with the banks operation in the UK, discussed earlier in this paper, was nothing short of blatant threat of seizing the bank. This warning seems, however, not to have been taken equally seriously in Iceland. According to British officials interviewed for this paper a low level and at first rather vague plan to deal with Iceland was slowly starting to emerge since May 2008, developing in gradual steps until the very end when the UK government finally struck on October 8th 2008 with implementing of the Anti Terrorist Act. The plan consisted of two options. Plan A revolved around getting Icelandic authorities on board with moving Icesave to the UK, which was to include proper insurance premium funds coming with it. If however, that would not work out, plan B was quite simply unilaterally seizing the bank.

As mentioned before, until Friday October 3d, Treasury officials believed a deal was in place with Icelandic authorities. Over the weekend however the UK side lost faith in the Icelanders, resulting in Plan B being kicked into action. The above mentioned investigative report prepared for Icelandic stakeholders also indicates that the UK side feared that the government of Iceland was losing control over to Central Bank governor Davíð Oddson, the country’s previous long standing PM and that he was planning to ‘veto the scheme’ – that is, the alleged deal on moving Icesave against 200 million pound insurance premium. The report also noted an expectation existing in the UK that the nationalized Icelandic banks would be ordered to reclaim their funds from abroad following such an Oddson veto. Furthermore, hints of Russian rescue money flowing to Iceland caused further concerns of Iceland going rogue.

When coming to the conclusion of applying plan B, UK officials interviewed for this paper claim that when dealing with Iceland, Brown and Darling wanted to been seen as being tough on rouge bankers. They pointed out that Iceland was viewed to be small enough to be made an example off; that it might serve as stark warning to others. Thus, when the big bank bailout was announced on Wednesday October 8th 2008, being tough on Iceland set the right political tone domestically, i.e. being tough on bad bankers while also preventing the banking system from collapse. Thus, this was also a balancing act. Applying the Anti-terrorism Act against Iceland was thus purposely used by the UK government to send a strong message and in doing so preventing others from straying off from the right path.

UK officials interviewed for this paper agree that the UK government had no idea what implication their action would have on the Icelandic banking system, that they were not thinking about Iceland as such in their actions, that this was quite simply only about British politics in time of crisis and that they did for example not contemplate Kaupthing collapsing as a result.

This view of events is somewhat supported when examining conversation between Icelandic Finance Minister Mathisen and Lord Paul Myners, the British Financial Services Secretary, on 8th October 2008. Myners said that it had worried UK authorities not being able to get reliable information out of Iceland on whether British depositors would be compensated or not. Lord Myners said that the UK government had thus decided to take action in protecting British financial interests against Iceland (SIC 2010, Vol. 7, Ch. 20: 151). When discussing the issue in the House of Lords on 28th October 2008 Myners cited the same reasons for applying the Anti-terrorism, Crime and Security Act, that is; lack of sufficient commitment from Iceland regarding deposits in the UK but also adding that the actions had been necessary because of volatility on the UK financial market. He said it had been necessary to act vigorously when Iceland seemed to be taking actions hurting British interests (SIC 2010, Vol. 7, Ch. 20: 154).

Quite clearly, we can conclude that these actions were a co-ordinated attack that had been in the making for days, if not weeks. Indeed, it was a bomb, which was to blow up the defensive wall that the Icelandic government was trying to build around domestic households.

When PM Haarde called in the morning on Thursday 9th October to complain about this brutal treatment, Brown did not even answer. Haarde was instead referred to Darling, who in their phone conversation justified the actions of the British authorities by referring to his talk with Icelandic Finance Minister Mathiesen two days earlier. Darling said that Mathisen had not been able to provide guaranty for the Icesave deposits and that he had indicated that obligations of the FME might not be honoured. Records of their 7th October conversation however do not support Darlings recollection from their talk (See SIC 2010, Vol. 7, Ch. 20: 152). Interestingly, when interviewed for this paper a senior UK Foreign Office official pointed out that Mathiesen had made a mistake when agreeing to talk on the phone with Darling that day, by doing so he had given Darling the excuse he needed to attack Iceland. The British official said that the phone call had made it easier for the UK to apply the legislation they had already for some time been preparing to use if the need presented itself.

From correspondence between the UK embassy in Iceland and the Treasury in the UK, now partly made available by the Freedom of Information Act 2000, the UK authorities seem to have felt quite confident of success in their dealings with Iceland. On late October 11th the UK ambassador reported to London that Treasury officials were travelling back from Iceland and that a deal on Icesave was within reach. UK officials discussed imminent ‘quick wins’ in the dispute against Iceland and contemplated ‘lifeline’ to be handed to Iceland after securing their victory (See in Jóhannesson, 2014).

The Icelandic government only made weak attempts to protesting against these actions taken by the UK. On 13th February 2009 the UK Treasury finally provided explanations in a letter signed by Clive Maxwell, claiming that the actions were not taken on grounds of terrorist operations. The letter quoted instead protocol in the law saying that the Treasury can act against those whose actions are construed as being to the detriment of the United Kingdom’s economy. The letter maintained that the British Treasury had believed it to be likely that the Icelandic government was discriminating in favour of Icelandic depositors and against UK and other foreign creditors. The letter quoted the 7th October phone call between finance ministers Mathiesen and Darling, claiming that the Icelandic authorities had failed to issue credible protection to foreign depositors. The letter also stated that the Icelandic government had provided contradictory information and said that the Icelandic actions were threating financial stability in the UK and that there was real risk of contamination (SIC 2010, Vol. 7, Ch. 20: 155). This is somewhat different to the explanation Finance Minister Darling told PM Haarde in their phone call on 9th October 2008.

Forced Agreement

Though ambiguity remained over many legal aspects of this highly complex situation, the UK and Dutch governments were pressuring Iceland to accept full responsibility for the Icesave accounts. While also pressuring Iceland to turn to the IMF, these governments were, with the help of the EU apparatus, lobbying neighbouring capitals to refuse it any loans except through an IMF programme (See in Independent Evaluation Office of the International Monetary Fund, 2014). Iceland’s government, however, was still afraid of the stigma of being the first Western state in four decades to surrender to the IMF (See for example, Mathiensen & Jósepsson, 2010)

Iceland gradually caved under the collective pressure and sought help from the fund. To Iceland’s surprise, the IMF board refused help unless, Iceland was made to understand, first clearing up the Icesave dispute with the British and the Dutch. Initially at the IMF yearly meeting in Washington already on October 11, Finance minister Mathiesen signed a Memorandum of Understanding with the Dutch where he agreed to an arbitrary court ruling on the issue. Only in its wake, on 22d October, was Landsbanki removed from the list of terrorist regimes on the UK Chancellor’s website. This agreement was however abandoned by the Icelandic government upon Mathiesen’s return in Reykjavik and in November it was replaced with a much more broadly based deal, what was called the Brussels Guidelines, which included EU involvement. The deal stipulated that Iceland would indeed accept responsibility, but that its European partners would help shouldering the cost. Holding out for not much more than a month, the government thus threw in the towel and under impossible pressure, accepted to guarantee deposits up to the minimum €20,887 stipulated by EU Directive 94/19/EC.

The EEA connection did not amount to much. IMF assistance was only made available after Iceland gave into the Dutch and the British. The government’s apparent weakness in responding to the UK attack added to the public’s frustration, especially when it had become clear that no money had illegally been moved out of the UK.

The initial forced Icesave agreements (The Memorandum of Understanding and the Brussels Guidelines) angered the public, which in wake of the Crash had taken to the streets in ever-greater numbers. After a series of protests, which later became known as the Pots and Pans Revolution (búsáhaldabyltinging), the grand coalition of the Independence Party (IP) and the Social Democratic Alliance (SDA) was ousted from power in late January 2009, paving the way for a new left-wing government – the first purely left-wing coalition in the history of the republic.

The severity of the currency crisis, which followed the banking collapse, can for example be seen in the fact that Iceland was the only country that had to revert to such extreme measures as implementing capital controls. The economy seemed paralysed. On Friday 10 October, the first of many popular protests started.

While the crisis was tightening its grip leading up to The Crash, Iceland’s neighbours had refused help unless it was through an IMF programme. After the collapse of the banks, the IMF gradually emerged as Iceland’s only viable option as it was still being isolated internationally. The British and Dutch governments had been successfully lobbying both the ECB and other European states not to aid Iceland independently, while at the same time pressuring Iceland to accept responsibility for the Icesave deposits. Iceland’s government, on the contrary, insisted that according to Directive 94/19/EC it was only obligated to ensure that a Depositors Guarantee Fund was in place and not explicitly responsible for foreign branch deposits (Blöndal & Stefánsson, 2008). Referring to a report written for the French Central Bank in 2000, Iceland argued that the Directive did not explicitly dictate that the state had to pick up the balance in the event of a systemic collapse (Banque de France, 2000).

This was, however, a difficult argument to get through in the crisis-ridden climate at the time. In order to prevent a further run on their own banks and to regain enough credibility to keep them afloat, the British, during these same days, led a coalition of G20 and EU states promoting collective international action emphasizing almost blanket depositors protection (see, for example, Pilkington, 2008). Allowing Iceland to leave depositors in foreign branches without such protection was seen as countering these efforts and indeed undermining the entire global financial system. In Whitehall, many feared that the Icelandic crisis was spreading to the UK, which also had approached the brink of widespread banking collapse. As a result, Iceland was being turned into an international villain. Iceland was trapped.

Though Iceland was still stubbornly hesitating, a joint economic programme was informally being negotiated that would include $2.1 billion from the IMF and a further $3 billion from the Central Banks of Denmark, Finland, Norway and Sweden in addition to a separate loan from Poland. Iceland’s resilience was however diminishing by the day. The pressure to accept responsibility for the Icesave deposits grew. According to some reports, Iceland was even threatened with being expelled from the European Economic Area (EEA), its economic lifeline to the outside world (Hálfdanardóttir, 2008). With dwindling foreign reserves and at risk of a serious shortage of, for example, medicine, food and other necessities from abroad, Iceland finally threw in the towel and applied to enter the IMF emergency program on 25 October.

IMF Blockade

Based on informal query the government expected that the IMF board would accept Iceland’s application on 3 November (Sveinsson, 2013). In the meantime, however, the British and Dutch governments, which previously had been pressuring Iceland to go to the IMF, were now lobbying behind the scenes against Iceland being allowed into the program unless first accepting responsibility for the Icesave accounts (Duncan, 2008). The NRC Handelsblad in the Netherlands reported that the blockage was being orchestrated by Dutch Finance Minister Wouter Bos and his British colleague Alistair Darling (Banning & Gerritsen, 2008). Later, the chief IMF representative in Iceland admitted to a block of not only the British and Dutch governments but also the Nordic states (Rozwadowski, 2013).

When Iceland would not concede, the IMF board postponed its decision and made clear that the plea would be blocked until accepting of liability for Icesave. During this time, a senior advisor in the IMF’s external relations department publicly acknowledged that the delay was directly due to unresolved disputes with the Netherlands and the UK (Transcript of Press Briefing by David Hawley, 2008). As Iceland was not a member of the EU and thus not subject to the European Court of Justice, and as the EFTA Court had no jurisdiction in the UK and the Netherlands, there seemed at the time to be no available legal body to rule on the dispute – apart from the previously mentioned initial arbitrary court that Finance Minister Mathiesen had felt forced to agree to on October 11 but the Icelandic government later abandoned on the ground that it was skewed in favour of the UK and the Netherlands through the EU’s involvement.

Iceland was thus caught in a tight spot. It needed money to prevent further deterioration of the already devastated economy but that meant agreeing to liabilities it did not want to accept. According to the Brussels Guidelines brokered by the French EU Presidency the government of Iceland agreed to cover the deposits of depositors in the Icesave accounts in accordance with EEA law. Iceland was to repay the Icesave debt over ten years, starting three years after signing, with 6.7 per cent interest on the loan. The agreement also entailed that the EU would continue to participate in finding arrangements that would allow Iceland to restore its financial system and economy. This was a precondition Iceland set for paying out according to the agreement. A stabilization package of financial assistance from the IMF was an explicit part of the agreement, which was to be discussed at the IMF Executive Board meeting on Wednesday 19 November (Agreed Guidelines, 2008).

Though these early agreements on the Icesave deposits were meant to end the quarrel, the dispute was only just starting. Ambiguity still remained. To keep up the pressure, and even to increase it, the Dutch Foreign Minister, Maxime Werhagen, threatened to veto Iceland’s EU bid in July 2009 (The Hague Threatens Iceland, 2009). The Icelandic government justified the agreements by claiming that it had had no choice. Either it bit the bullet and accepted responsibility or the country would remain frozen out, thus without access to vital imports such as medicine and food. The Icelandic government explained that no one supported us; not even our Nordic neighbours were willing to listen to Iceland’s legal arguments. Without agreement, Iceland would no longer have been considered a modern state, internationally recognized as equal to others, but would rather have been relegated to being an isolated outpost surviving on local agriculture and fisheries alone. The signing was, however, a serious blow to the country’s political identity, as the postcolonial national identity insisted on not giving in to foreign pressure. It thus caused great strain domestically (Bergmann, 2014b).

After Iceland’s concession to the British and the Dutch over Icesave, the general public took to the streets in even greater numbers than before, now not only protesting against our government’s mismanagement of the economy but also against apparent foreign oppression. Frustration grew as businesses closed and more and more people were laid off while inflation rose to 20 per cent. The protest was now spreading around the country.

Icesave II and III

The new left-wing government parachuted in on the canopy of the Pots-and-Pans revolution contested some of the premises of the Brussels Guidelines, which they claimed was unlawfully imposed by foreign forces. Under the leadership of Finance Minister Sigfússon, chairman of the Left Green Movement, the new government abandoned the multinational approach and instead sent their representatives to London and The Hague to renegotiate terms. This result, which in effect was merely a loan agreement with the foreign ministers of the Netherlands and the UK, where Iceland accepted to cover up to €4.5 billion, instantly became one of the most unpopular agreements in the history of the country. Only after it’s signing however was the freezing order on Landsbanki and related Icelandic assets lifted.

Similar delaying tactics within the IMF on reviews, as when entering the program initially, was furthermore confirmed in a report by the Independent Evaluation Office of the IMF into its response to the financial crisis. The report spoke of ‘the active involvement of (at least some) Nordic countries served to delay the first review by several months because […] pressure […] by their European partners not to provide financing assurances in an attempt to influence the outcome of the ongoing discussion on the extent of deposit guarantees for Icesave.’ (Independent Evaluation Office of the International Monetary Fund, 2014)

Parliament reluctantly accepted the agreement, but only after adding to it new preconditions, referring to Iceland’s ability to pay. These the UK and the Dutch refused. A new negotiation committee was thus formed, which was able to lower the interest rate a little further. After a fierce debate, the amended agreement was accepted in Parliament on the last day of December 2009. The new government was now also accused of caving in to foreign pressure and surrendering Icelandic interests to external forces.

The saga took a dramatic turn on 5 January 2010, when the President of Iceland, Ólafur Ragnar Grímsson, denied signing the law necessary to ratify the new agreement after receiving a petition of 60,000 Icelanders asking him to reject the deal. (He had signed the revoked earlier one). This was an exceptional move.

In early 2010, Icelanders once again found themselves in unknown waters. A quarter of the electorate had signed a petition to be put to the President asking him to decline signing the bill, which was thus as a result of the non-signing subsequently put referendum were 90 per cent of voters refused ratifying it. The country was in a mood of defiance. Many felt betrayed by the UK government when it had invoked the Anti-terrorist Act – an action that ultimately drove our last bank into the ground. Icelanders therefore found the idea that they should foot the whole bill alone difficult to swallow. There was also a legal twist. Directive 94/19/EC upon which the British and Dutch had based their claim was rather unclear. It stipulated only that states are obliged to set up special deposit guarantee schemes. It did not speak of a state guarantee. Many Icelanders were thus frustrated by the fact that the British and the Dutch had refused the request for an impartial court to rule on the issue.

The general perception in Iceland was thus that the government had again been bullied by an overwhelming foreign power into signing an unjust agreement. It is generally accepted that the government and Parliament only accepted the initial deals to achieve other ends, rather than because they felt under obligation to pay. It was simply a necessary evil to gain access to the IMF. And then there was the cost. €4.5 billon might have seemed a small figure by UK standards but this was almost half Iceland’s GDP. Divided by Iceland’s small population, the bill amounted to more than €12,000 per head, or just under €50,000 per household. If Landsbanki’s assets deteriorated any further, this would place a devastating burden on an already debt-ridden population.

In addition to the wide-ranging general feeling of frustration, the appearance of leniency towards the British and Dutch spurred a new wave of protest in mid-2010, which heightened when Parliament resumed in the early autumn, to find thousands of protesters surrounding the building, once again.

After twice going back on signed agreements (in addition to abandoning the two initial deals), the government found it difficult to go knocking on doors in London and The Hague asking to renegotiate the deal once again. Headed by a hired American negotiator, the new team was nevertheless in the end able to bring the interest rate down to 3 per cent. This time, a large majority emerged in Parliament when the IP joined ranks with the government in backing the new deal. The Progressive Party (PP) though still opposed any agreement. Yet, to the surprise of most, President Grímsson also refused the third agreement. In a second referendum, on 9 April 2011, the new agreement was refused by a two-thirds majority, illustrating a clear division between Parliament and the public. Now, there was no longer anything to negotiate. The case was sent to the EFTA Court, where the EU was backing the claim of the UK and the Netherlands and the EFTA Surveillance Authority against Iceland. Finally, on 28 January 2013, the court ruled in favour of Iceland, which was vindicated of wrongdoing in its handling of the Icesave deposits (Judgment of the Court, 2013). The court refused the EU’s and the UK and the Dutch governments’ claims of a state guarantee, such as Iceland had been forced to accept in the earlier Icesave agreements. Later UK and the Netherlands filed a much more limited claim before court in Reykjavik, still pending judgment at time of writing.

Conclusion

Internationally the Icesave dispute reveals interesting contestation and political production (and re-production) of constitution of international legality. Development of international legality, as understood by Rajcovic et al (2016), has in this paper been traced throughout the course of this particular crisis. Domestically the issue was dictating politics in the post-crisis period in Iceland. To the surprise of many Icelanders, after the Crash had left Iceland in financial ruin, the Dutch and the British still enjoyed the full backing in the Icesave debacle of our neighbours in the European community. The UK and Dutch authorities were able to use both the EU and the IMF to pressure Iceland into accepting responsibilities that Iceland’s authorities never believed were theirs to shoulder.

 From interviews with UK officials conducted for this paper is seems clear that the UK side believed that a high level political deal was in place with the Icelandic government of fast tracking Icesave into the UK banking space and that the deal included insurance premium injection from Iceland of 200 million pounds. Interestingly, though, Icelandic officials claim not to have any knowledge of such a deal. It is furthermore evident that the UK government lost faith in Icelandic authorities during the weekend of 3d to 5th October 2008, finally kicking into action plan B of attacking Iceland by use of the Anti-terrorist Act, which had for a while been in the making in Westminster. When doing so it served the UK government well to take a tough stand on Iceland, while simultaneously bailing out banks domestically – being tough on Iceland became a balancing act, serving the purpose of sending tough message to others when announcing the massive bank bailout.

The Icesave case illustrates that in time of crisis international muscle power still prevails. In time of need small states have difficulties when defending off larger states sharp attacks. In a European context, being formally a non-EU member made it easier for the UK and the Netherlands to deploy the EU apparatus to pressure Iceland than they would against a fellow member state. The illusion of a shelter amongst the family of Nordic states was furthermore also shattered during Iceland’s Crash, which was therefore not only economic but also political and indeed psychological. Iceland had been frozen out in terms of diplomatic relations. Suffering the deepest crisis in its post-war history, the country was already drained of foreign currency when the IMF finally opened its doors in November 2008, after Iceland had, under coercion, finally agreed to guarantee the Icesave deposits. By use of delaying tactics of reviews within the IMF the UK was, with the help of some of the Nordics, able to maintain the pressure on Iceland. However, after the immediate crisis was over, it was through the EFTA Court, a European institution, that Iceland, as a small state, was finally able to escape the pressure applied by the British and Dutch governments.

 

 

 

References

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Darling, A. (2008, 10). Extra help for Icesave customers. BBC Online. London. Retrieved from http://news.bbc.co.uk/2/hi/business/7658417.stm

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Hussain, A. (2006, 10). Icesave looks like a hot deal. The Sunday Times. London. Retrieved from http://www.thesundaytimes.co.uk/sto/business/money/savings/article158555.ece

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* Acknowledgements: This research was conducted by examining generally available data and through semi-structured off-the-record background interviews with several officials in the UK and Iceland. The interviews are referenced where appropriate in the text but due to anonymity they are not individually listed in the bibliography. The research was financially suported by the Social Science Instute of the University of Iceland, through a project analysing foreing impact on the Icelandic banking collapse. Parts of the paper are furthermore based on my book Iceland and the International Fiancial Crisis: Boom, Bust and Recovery (2014). Basingstoke and New York: Palgrave Macmillan.

Endnotes

[1] Authors interview with Mathiesen in Desember 2013.

[2] I was allowed only reading the unpublished report in Reykjavik on October 21st 2014

Interpretation of Economic, Social and Cultural Rights by Human Rights Bodies in Times of Economic Distress. The case of Greece

Introduction

Economic, social and cultural rights have borne the brunt of the recent economic crisis and the austerity measures adopted to counter it. Due to their gradual implementation and the need of positive measures to implement them, they were the first to be attacked especially in developed countries where certain achievements in the field of labour rights and social security had attained quite a high standard. The proposals to amend the labour law in France and the fierce reaction of the people are indicative of this trend[1]. Given that these achievements were the result of the progressive implementation of economic, social and cultural rights, as stipulated by international human rights treaties, most of the initiatives to restrict them result in prohibited retrogressive measures.

States falsely consider that it is easier to limit economic and social rights instead of civil and political rights for various reasons. First of all there is much discussion regarding the real justiciability of social rights. Secondly, social rights are interpreted by international human rights bodies mainly through an expansive interpretation of civil and political rights. Thirdly, the dire situation of economic, social and cultural rights in most developing countries renders the discussion of their limitation in developed countries somewhat inappropriate or at least awkward. Finally, certain researchers maintain that sometimes social rights are given lower status as a matter of ideological choice[2], while their real protection is difficult due to inequalities especially within the urban centres. After discussing the possible ways of applying economic, social and cultural rights in the first part of the essay, I will then examine their application during economic crises with a special reference to Greece focusing mainly on two fields, labour rights and social security rights, and the case-law produced by international human rights bodies in that respect.

The rise and current protective framework of economic, social and cultural rights in international human rights law

I. The global normative framework: indivisibility of civil and political rights and economic, social and cultural rights

1.  At the international level

References to human rights in general and economic, social and cultural progress and development in particular are already included in the UN Charter[3]. The first international instrument – albeit not legally binding[4] – that refers both to civil and political rights and economic, social and cultural rights is the Universal Declaration of Human Rights (UDHR)[5]. Civil and political rights – the so-called “first generation” rights – were distinguished from economic, social and cultural rights or “second generation” rights in that they required no positive action by the state in order to be safeguarded. The latter had only to refrain from interfering with the right. To the contrary, it was deemed that economic, social and cultural rights required the allocation of resources and public expenditure. Therefore, they were not of immediate implementation but could be achieved only progressively. During the Cold War, Western states considered civil and political rights to be the only enforceable rights. There is also a “third generation” of rights that comprises the rights to development, self-determination, healthy environment, natural resources, collective rights etc.[6].

One can easily draw the conclusion that this is an obsolete argument that cannot firmly support a human rights separation theory, since it has already been established in international human rights jurisprudence that abstention is not enough for the protection of civil and political rights but these require positive measures as well[7], while the Vienna Declaration and Programme of Action[8] reaffirmed that: “All human rights are universal, indivisible and interdependent and interrelated. The international community must treat human rights globally in a fair and equal manner, on the same footing, and with the same emphasis”[9]. Even before that, the Proclamation of Teheran in 1968, stressed that “human rights and fundamental freedoms are indivisible, the full realization of civil and political rights without the enjoyment of economic, social and cultural rights is impossible”[10]. Moreover, the Committee on Economic, Social and Cultural Rights has repeatedly reaffirmed that human rights are “interdependent and indivisible”[11].

While most international human rights treaties of special protection contain provisions both for the protection of civil and political rights and economic, social and cultural rights, verifying thus their interconnected character[12], this approach was not followed by the UN Economic and Social Council when the issue of adoption of a universal covenant arose. At that time, the delegates considered that civil and political rights, on the one hand, and economic, social and cultural rights, on the other, could not be implemented in the same way[13]. The former required that states refrain from certain harmful action, while the latter could be implemented only progressively, by means of positive measures and appropriate legislative action.

Hence, the UN General Assembly took the policy decision to request the drafting and eventual adoption of two separate covenants, one dedicated to civil and political rights and the other to economic, social and cultural rights[14]. Both were submitted simultaneously for consideration to the General Assembly so that their unity could be emphasized; it was the International Covenant on Civil and Political Rights (ICCPR) and the International Covenant on Economic, Social and Cultural Rights (ICESCR). They were adopted on the same day by the same UN General Assembly resolution[15]. However, the two moved hence on separate tracks.

The competent organ to control implementation of the ICCPR, through the consideration of periodic reports submitted by states-parties, is the Human Rights Committee[16]. On the contrary, monitoring of the ICESCR was entrusted initially to the ECOSOC, which had the duty to receive – through the intermediary of the UN Secretary General – and consider reports on the measures that states have adopted and the progress made in achieving the observance of the rights recognized in the ICESCR[17]. The Committee on Economic, Social and Cultural Rights was established only in 1985 under resolution 1985/17 (28 May 1985) of ECOSOC and was mandated to carry out henceforth the monitoring functions assigned to ECOSOC in Part IV of the ICESCR[18].

Furthermore, the ICCPR was equipped from the very beginning with an Optional Protocol which empowered the Human Rights Committee to receive and consider individual communications on alleged violations of the rights of the Covenant. Through the mechanism of individual communications the Human Rights Committee has accumulated a remarkable case-law, which is referred to very often by other international judicial and quasi-judicial human rights bodies. The Optional Protocol to the ICESCR, which established a similar individual complaints procedure regarding economic, social and cultural rights was adopted only in 2008 and entered into force on 5 May 2013. This lack of individual complaints mechanism constituted a major practical obstacle for those that supported the justiciability of economic, social and cultural rights.

2. At the European level

The same separation is prevalent within the European continent, where this differentiation of first and second generation rights was reflected in the adoption of two instruments having a different control mechanism. The main instrument of general human rights protection, the European Convention on Human Rights adopted in 1950 and binding on all Council of Europe member states[19], and its Additional Protocols recognise only civil and political rights (and the right to education from second generation rights by virtue of article 2 Protocol no 1). What is more, the instrument is vested with a unique implementation mechanism. A European Court of Human Rights (ECtHR) is entrusted with considering individual applications on human rights violations, issuing judgments that are binding upon the respondent state, while a political organ, the Committee of Ministers, is responsible for monitoring the compliance of the member state involved, whenever a violation is found by the ECtHR, through the proposal of individual and general measures to remedy the violations. While the ECtHR protects mainly civil and political rights, it also guarantees indirectly economic, social and cultural rights by interpreting them under the prism of civil and political rights[20].

Economic and social rights as such are guaranteed by the European Social Charter (1961) and the Revised European Social Charter (1996), ratified by 27 and 34 states respectively[21]. The instrument is equipped with an Additional Protocol providing for a system of collective complaints (1995). The monitoring organ in this case is not a court but rather a Committee, the European Committee of Social Rights (ECSR), which is composed of independent experts. The latter monitors the compliance of the contracting states through two procedures: the reporting procedure, according to which states are bound to submit national reports regarding the implementation of the provisions of the Charter, and the collective complaints procedure which allows for the lodging of complaints. The ESCR examines the reports and adopts conclusions, while in respect of collective complaints it adopts decisions. Neither of them is binding.

Finally, the Charter of Fundamental Rights, adopted in the framework of the EU and having the same legal value as the founding treaties by virtue of the entry into force of the Lisbon Treaty[22], translates in a binding document the indivisibility of human rights as it was officially recognised in the Vienna Plan of Action: human rights are universal, indivisible and interdependent and interrelated[23]. Therefore, the Charter includes all three sets of rights: a) classical first generation rights (civil liberties, political rights, judicial protection), b) second generation (economic, cultural and social rights), 3) third-generation rights e.g. protection of the environment. And rights that do not fit in any of the abovementioned categories, e.g. data protection, consumer protection. There is however a gap as to which social rights are declared as principles and which as justifiable rights.

II. The justiciability of economic, social and cultural rights[24]

Formerly there was much discussion on whether economic, social and cultural rights could be considered justiciable. The prevalent opinion was that civil and political rights and economic, social and cultural rights remain in two different legal instruments and the latter have not attained the same degree of justiciability and enforceability as civil and political rights. The main arguments against are the following[25].

The “policy argument”

  • First of all it was considered that the implementation of economic, social and cultural rights was clearly a matter of policy. According to this point of view, courts are an inappropriate forum to adjudicate and pronounce on issues of social policy. And in case they are called to adjudicate, they should accord a considerable margin of appreciation to the state authorities[26].

The “limited resources argument”

  • Moreover, since their effective protection required resources, it rested solely on the state to realize them progressively. Accordingly, states argue that they do not have adequate resources to provide even the most elementary socio-economic rights to their populations. Therefore, courts could not play an active role in this procedure, because otherwise they would have to meddle in the legislative and executive function by making the law rather than applying it. It would be, in other words, an impermissible form of judicial activism. The partisans of the progressive realization approach had an unexpected ally: article 22 UDHR which stated that “Everyone, as a member of society … is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality”.

The “effective remedy argument”

  • Another argument raised by those maintaining the non-justiciability of socio-economic rights is the fact that the ICESCR does not contain any provision on the duty of states to provide an effective remedy in the national legal order to individuals whose socio-economic rights have been violated. Indeed, the right to an effective remedy is a cornerstone provision in all human rights treaties protecting civil and political rights[27].

Those arguments representing a rather traditional view on the matter have thence been rebutted by the following[28].

The “violations approach”

  • One alternative, maintained by A. Chapman is the “violations approach”[29]. According to this, one should set aside the progressive realization of economic, social and cultural rights, which does not allow for their monitoring, and rather focus on the state conduct that violates these rights. Thus, violations could result from governmental measures that actually contravene the provisions of relevant international instruments or from the creation of conditions that do not foster or permit the realization of these rights and, last but not least, from policies and legislations that fail to fulfill minimum core obligations. For example, a state in which a significant number of individuals are deprived of essential foodstuffs, of primary health care, of basic shelter and housing or of basic education is failing to discharge its obligations under the ICESCR[30]. In that context, the Committee on Economic, Social and Cultural Rights has also stressed that vulnerable members of society must be protected, even in times of severe resources constraints, caused by adjustment programmes, economic recession or other factors[31].

The evolving role of courts in a democratic society

  • Another argument in favour of the justiciability of socio-economic rights relates to the role of courts in general in a democratic society. Indeed, a constant disagreement among lawyers is the difference between “legal” and “political” matters. One could seize the courts for the former but not the latter. For a long time it was suggested that matters involving the allocation of resources should be left to the political authorities rather than the courts. It is an invalid argument, if we take into account that a great range of matters have always political implications. This should not impede the courts from adjudicating on them. Likewise, courts are already involved in cases which have considerable resource implications. This approach has been also adopted by the Committee on Economic, Social and Cultural Rights, which has pointed out that the active involvement of courts in questions implicating socio-economic rights is imperative, in order to protect the rights of the most vulnerable and disadvantaged groups in society[32].

Economic, social and cultural rights that can be enforced immediately

  • Furthermore, one could distinguish between those socio-economic rights that could be enforced immediately and others that are by definition subject to progressive realization. The Committee on Economic, Social and Cultural Rights, in its General Comment no.3[33], asked for the provision of judicial remedies with respect to rights which may be considered justiciable. It also enumerated a non-exhaustive list of rights that “would seem capable of immediate application by judicial and other organs in many national legal systems”. These include the equal right of men and women to the enjoyment of all economic, social and cultural rights (article 3), the right of everyone to the enjoyment of just and favourable conditions of work (article 7a)i), the right of everyone to form trade unions and the right to strike (article 8), the rights of children (article 10 §3), the right of free and compulsory primary education (article 13 §2a), of parents and, when applicable, legal guardians to choose for their children schools (article 13 §3), the right of individuals and bodies to establish and direct educational institutions (article 13 §4), freedom indispensable for scientific research and creative activity (article 15 §3). As the Committee stated, “the fact that realization over time is foreseen under the Covenant, should not be misinterpreted as depriving the obligation of all meaningful content”[34].

Domestic application of the Covenant

  • Fourthly, the absence of a provision on effective remedies does not constitute per se an obstacle to the justiciability of economic, social and cultural rights. Although the ICESCR does not contain a counterpart to article 2 §3b ICCPR, it does stipulate that: “Each State Party to the present Covenant undertakes to take steps, individually and through international assistance and co-operation, especially economic and technical, to the maximum of its available resources, with a view to achieving progressively the full realization of the rights recognized in the present Covenant by all appropriate means, including particularly the adoption of legislative measures” (article 2 §1). Pursuant to General Comment No. 9 of the Committee on Economic, Social and Cultural rights the phrase “appropriate means” also includes domestic legal remedies, which reinforce every other initiative[35]. According to the Committee: “Where the means used to give effect to the Covenant on Economic, Social and Cultural Rights differ significantly from those used in relation to other human rights treaties, there should be a compelling justification for this, taking account of the fact that the formulations used in the Covenant are, to a considerable extent, comparable to those used in treaties dealing with civil and political rights”[36]. In the same vein, the Inter-American Court of Human Rights has used article 25 ACHR to request effective remedies for the demarcation and titling of indigenous land in cases where civil and political rights and economic, social and cultural rights intersect[37].

The “permeability principle”

  • Another way to address the question of justiciability is through the “permeability principle”[38]. According to this, civil and political rights are used as a basis for admitting complaints concerning economic, social and cultural rights. For instance, allegations regarding the violation of the right to adequate housing could be treated though the right to property or violations of the right to health could be admitted as a possible infringement of the right to life or the right to humane treatment. The contribution of the Inter-American Court of Human Rights case-law to this discussion is priceless. Indeed, the IACtHR cuts the Gordian Knot of the justiciability of socio-economic rights, by protecting them through the dynamic and broad interpretation of civil and political rights. In that way, the indivisibility and interconnected character of the two generations is reinforced, since economic, social and cultural rights are inherent in civil and political rights.

The impact of austerity measures on economic and social rights. Issues of effective protection

I. The position of the Committee on economic, social and cultural rights

The centrepiece of the ICESCR is the obligation on States parties to respect, protect and fulfil economic, social and cultural rights progressively, using their maximum available resources[39]. Moreover, states parties to the ICESCR have an immediate obligation to ensure the implementation of a minimum essential level of all economic, social and cultural rights. This minimum core[40] covers for instance all obligations that ensure an adequate standard of living such as essential health care, basic shelter and housing, basic forms of education etc. In order to achieve this goal, available resources have to be allocated proportionately. Thus, for instance, a budget that relies heavily on military expenditure will save little for education or health care. Even if available resources are totally inadequate, the state bears the burden of proof to demonstrate that it has used all its resources in a proper manner so as to cover the minimum core[41].

However, states enjoy a wide margin of appreciation (to borrow the phrase inaugurated by the ECtHR)[42] regarding the implementation of socio-economic rights. The obligation of progressive realization carries naturally the prohibition – albeit not absolute – of retrogression. According to General Comment no 3, any deliberate retrogressive measure, if not prohibited, requires “the most careful consideration and would need to be fully justified by reference to the totality of the rights provided for in the Covenant and in the context of the full use of the maximum available resources”[43]. This obligation remains the same even in times of economic distress or adjustment programmes.

Hence, unlike the International Covenant on Civil and Political Rights, derogations are not allowed from the ICESCR even during times of economic emergency[44]. According to the Maastricht Guidelines on violations of economic, social and cultural rights, states are obliged to respect, protect and fulfil economic, social and cultural rights through appropriate legislative, administrative, budgetary, judicial and other measures and failure to observe this obligation may result in violation of said rights[45]. For instance, arbitrary or sweeping forced evictions, which are frequent in situations of economic crises[46], violate the right to housing. Withdrawal of basic labour standards protecting private employees may amount to a violation of the right to work. Last but not least, denial of basic health care may result to a violation of the right to health in extreme circumstances even of the right to life or the prohibition of degrading treatment.

Despite the fact that full realization of economic, social and cultural rights is achieved progressively, this does not alter the legal obligation of states to adopt measures immediately or as soon as possible to that direction. States are obliged to demonstrate that they are actually taking such measures and that they are making progress for the full realization of these rights. Thus, the notion of “progressive realization” cannot be used as a pretext to avoid full execution of the Covenant’s provisions. Furthermore, certain minimum core obligations such as essential foodstuffs, essential primary health care, basic shelter and housing, or the most basic forms of education have to be satisfied, irrespective of the economic distress or the availability of resources[47]. In a letter[48] addressed by the Chairperson Pillay to all states parties it is stressed that even though states are allowed to adopt austerity measures in order to overcome severe financial crises, however these decisions should not lead to the denial or infringement of economic, social and cultural rights, especially if this results in negative impacts on vulnerable and marginalized individuals such as the poor, women, children, persons with disabilities, older persons, people with HIV/AIDS, indigenous peoples, ethnic minorities, migrants and refugees. Hence, while adjustments in the implementation of economic and social rights are inevitable, these should not lead to regression. It is interesting that the Chairperson referred to “the pressure that is exercised on many States parties” without clarifying where this pressure comes from: the overall economic necessity or third parties?

In her letter the Chairperson also identifies four requirements that have to be met by adjustment programmes: a) they must be a temporary measure, b) they must be necessary and proportionate, c) they must not be discriminatory but they must strive to mitigate inequalities especially with regard to the disadvantaged, d) the minimum core content of economic and social rights, as developed by the International Labour Organization, must be ensured at all times. Strangely enough, these requirements are identical to those applied for derogation measures from civil and political rights during states of emergency[49].

II. The case-law of the European Court of Human Rights

Even before the current economic crisis, the ECtHR had rendered judgments that included an economic dimension: violation of the right to life regarding the death of fifteen children in a home for children with severe mental disabilities due to lack of food, heating and basic care[50], inadequate access to health care for detainees or asylum-seekers raising issues under articles 2 and 3 ECHR[51], health rights of prisoners[52], violation of article 8 ECHR due to the planned eviction of Roma from an unlawful settlement without proposals for rehousing[53], total deprivation of a social pension[54], qualification of all social benefits as possessions even if they are non-contributory, so as to be covered by article 1 of Protocol No. 1 ECHR[55] etc. Of particular interest was a case regarding insufficient amounts of pension and the allegation of the applicant that this amounted to inhuman treatment, although the Court did not find a violation[56].

With regard to austerity measures adopted by states embroiled in budgetary crises and adjustment programmes, the European Court of Human Rights has already set a clear legal precedent. In Da Silva Carvalho Rico/Portugal the outcome was quite predictable: the ECtHR has dismissed the case applying the “proviso of the possible” doctrine[57]. According to this theory, borrowed by German constitutional law and applied by the Portuguese Constitutional Court as well, the state cannot be forced to comply with its obligations in the framework of social rights if it does not possess the economic means to do so[58]. Thus, budgetary constraints on the implementation of social rights can be accepted provided that they are proportionate to the public aim sought and they do not deprive the right of its substance. With a similar reasoning, the Court declared manifestly ill-founded applications against pension reductions for civil servants in Portugal[59] or the temporary reduction in the pensions of judges in Lithuania[60] which had their origin in austerity measures as a response to the economic crisis.

Against this background, we are waiting with extreme anticipation the judgment of the Grand Chamber that will reconsider the case Béláné Nagy/Hungary. The Chamber has already found that the removal of a disability pension through consecutive amendments to the eligibility criteria was considered excessive and disproportionate, thus constituting a violation of article 1 of Protocol No. 1[61].

The global economic crisis of 2007-2008 and its impact on Greece

I. The beginning of the crisis

The causes of the global economic crisis of 2008 have already been extensively discussed and will certainly continue to preoccupy political economists in the years to come, especially insofar as no safe exit from the overall crisis is yet envisaged. Consequently, we will not purport to delve into the multifaceted causes of the financial crisis, but rather to offer an overview of it and most importantly the way it has impacted on Greece and how it prompted the relevant austerity measures.

The financial crisis traces its roots in the USA back in 2007. The crisis hit initially a small segment of the financial markets, namely subprime mortgages, but soon it resulted in global recession[62]. Shortly after the initial blow, many financial institutions mostly in developed countries have been affected. National governments were required to bailout banks; the housing market was affected resulting in evictions, while prolonged unemployment became a quasi-permanent feature of contemporary societies. The crisis has had an adverse impact both in developed and developing countries, the latter mainly through the trade channel or through workers’ falling remittances[63]. According to reports, the losses of gross domestic product amounted to 10% of global output in 2008-2010, while the loss in values of assets and the loss of personal income precipitated by the austerity measures cannot still be calculated with certainty[64].

II. The immediate aftermath: the European sovereign debt crisis

The global financial crisis resulted in a European sovereign debt crisis in the end of 2008-2009 which affected primarily Iceland, Greece, Portugal, Ireland, Spain and Cyprus. The affected countries were unable to repay government debt or to bail out over-indebted banks without the assistance of third parties. Given the particularities of the European integration – the eurozone is only a currency union and not a fiscal union thus member states maintain different tax, remuneration and pension rules – the options available to political leaders to react were limited. In fact, EU and the eurozone in particular had no contingency plan to counter the effects of an economic crisis of such a magnitude.

The first mechanism that was put in place was the European Financial Stability Facility (EFSF). The EFSF was established in June 2010 as a “société anonyme” under Luxembourgish law and has provided financial assistance to Ireland, Portugal and Greece, through the issuance of bonds and other debt instruments on capital markets. It has 17 shareholders, namely the eurozone member states. Since 1.7.2013 the EFSF is not allowed to engage in new financing programmes or enter into new loan facility agreements. The EFSF assistance programme for Greece expired on 30 June 2015[65].

It was replaced by the European Stability Mechanism (ESM), a permanent international financial institution, established by an intergovernmental treaty signed by the euro area member states on 2 February 2012[66]. ESM is a crisis resolution mechanism, providing stability support to eurozone countries threatened by severe financing problems. Its financial assistance is not funded with taxpayer money; the funds are rather acquired by issuing capital market instruments and engaging in money market transactions. ESM has 19 shareholders – the euro area member states – and is open for membership to all EU member states that will adopt the euro as their sole currency in the future. Since 1 July 2013 it is the sole mechanism for responding to new requests for financial assistance and has thus far assisted Greece, Cyprus and Spain, the first two through loans subject to macroeconomic adjustment programmes and the latter through a loan to government for bank recapitalization. Greece is the sole eurozone member state that has received support from both institutions and the only one to remain in the ESM stability programme. Cyprus has exited successfully the programme on 31.3.2016, while the financial assistance programme for Spain expired on 31.12.2013[67].

Participation in these financial stability mechanisms entails as a short- and long-term consequence the adoption of austerity measures and far-reaching privatization programmes. In fact, austerity measures were the primary political choice of governments in their effort to stem the effects of the economic crisis and reduce deficit and public debt[68]. Even when applied with restraint, austerity measures have an adverse impact on the enjoyment of acquired economic and social rights and thus on our ordinary and everyday life. This approach was inaugurated by the International Monetary Fund that implemented the Structural Adjustment Facility in 1986 and the Enhanced Structural Adjustment Facility one year later, making financial assistance conditional on the implementation of neoliberal structural adjustment programmes impacting adversely on human rights[69].

III. The impact of the economic crisis on Greece

1. The financial assistance provided to Greece

Due to its macroeconomic imbalances[70] and the lack of flexibility resulting from its status as a eurozone member state, Greece was the first eurozone country affected by the global economic crisis. Overcoming the “no bail-out” clause of article 125 of the Treaty on the Functioning of the EU, which prohibits the Union and individual member states from assuming the commitments of governments and other public authorities[71], the first financial assistance package for Greece was agreed in April 2010 and consisted of bilateral loans from eurozone member states and the International Monetary Fund (the so-called Greek Loan Facility).

However, the Greek Loan Facility was inadequate to counter a more or less systemic crisis. Therefore, in March 2012 the Eurogroup approved a second support programme for Greece, provided again by the Eurozone member states and the IMF. This time, the Eurozone assistance was not provided though bilateral loans but through the EFSF. Furthermore, the Eurozone member states decided to apply the procedure of the Private Sector Involvement (PSI) in the restructuring of the public debt. Thus, in May 2012 about 97% of privately held bonds took a 53,5% cut of the face value of the bond, corresponding to an approximately 107 billion euro reduction in Greece’s debt.

Overall political instability and reluctance of the Greek governments to adopt and implement measures and reforms requested by its lenders led to another impasse in the summer of 2015 when Greece, unable to repay its debts, arrived very close to official insolvency. Controls were imposed on Greek banks to avoid a massive flow of capital and the Greek government decided to submit a request for financial assistance to the ESM. After laborious negotiations of 17 hours the parties reached an agreement (the Financial Assistance Facility Agreement) on 13 July 2015. The agreement was approved by national parliaments and on 19 August 2015 by the ESM Board of Governors. The precise amount of ESM financial assistance will depend on the IMF’s decision regarding its participation in financing the programme, and on the success of reform measures by Greece, including the privatisation of state assets[72].

2. The measures adopted

In order to receive the financial support packages, Greece was requested to adopt a series of specific measures of adjustment the implementation of which was monitored in the first two phases (Greek Loan Facility and EFSF) by officials from the European Commission, the European Central Bank and the IMF, the so-called “Troika”, a unique institution of an ad hoc nature whose establishment lacked an appropriate legal basis in primary EU law. For this purpose a Memorandum of Understanding was signed between the member state concerned and the “Troika”, whereby the member state – in our case Greece – undertook to carry out a number of actions in exchange for financial assistance. The assistance was provided on the basis of strict conditionality; thus the successive Greek governments enjoyed limited leeway in the adoption of the measures required to overcome the crisis[73]. The same stands for the ESM: a set of prior actions were requested urgently in order to enter into negotiations for the reform agenda as it was set out in the most recent Memorandum of Understanding which was approved by the ESM Board of Governors on 19 August 2015 following its endorsement by ESM members according to their national procedures. The MoU of August 2015 focuses on four key areas: restoring fiscal sustainability; safeguarding financial stability; boosting growth, competitiveness and investment; and reforming the public administration.

Given the urgency of the situation, the measures adopted at the national level in the course of the three successive financial assistance packages were not carefully balanced leading to restrictions on economic and social rights. A series of laws, presidential decrees and ministerial decisions form the backbone of the austerity legislation. Due to their high number and lengthy content a detailed analysis of the said legal documents is beyond the scope of the present article. We will provide a selection of the most representative legislations adopted and we will focus on the ones that are detrimental on the social rights selected for analysis in the present article: social security and labour rights.

The first set of social rights attacked by austerity measures were labour rights and social security rights. A set of laws[74] introduced tectonic changes, amongst which figure the following[75]:

  • modifications to both public and private pension schemes;
  • reduction of public sector wages by 12% and later a further reduction of 3%.;
  • remuneration of special apprenticeships for people between 15-18 years old with 70% of the general minimum wage, while new entrants in the labour market under the age of 25 would be remunerated with 84% of the general minimum wage;
  • establishment of the wage setting system by law, whereas the minimum wage would be determined by a government decision, after consultation with the social partners;
  • reduction of the general minimum wage by 22% for workers older than 25 years old and by 32% for younger workers;
  • precedence of the company level CEAs over sectoral or occupational ones even if the latter contained more favourable provisions, provided that the safety net of the National General Collective Agreement is observed;
  • arbitration procedures could be initiated only upon mutual consent of the parties, while the arbiter shall take into consideration the economic distress and the requirements of the adjustment programme;

 

Austerity legislation and effective protection of economic, social and cultural rights[76] in Greece

I. Social security rights

Article 12 of the European Social Charter guarantees the right to social security. Pensions are a principal branch of social security[77]. Both the European Court of Human Rights and the European Committee of Social Rights examined cases related to pension cuts, reaching totally different conclusions.

In Koufaki and ADEDY/Greece, the ECtHR found no violation of article 1 Protocol 1 ECHR, guaranteeing the right to property. The Strasbourg court reaffirmed the wide margin of appreciation that states enjoy with regard to their social policy and concluded that the reductions pursued a legitimate aim and were not disproportionate[78]. Moreover, there was no evidence that the applicant run the risk of falling below the subsistence threshold, while the removal of the thirteenth and fourteenth months’ pensions had been offset by a one-off bonus.

To the contrary, the European Committee of Social Rights, concluded in five decisions on collective complaints against Greece that the cumulative effect of the modifications of the pensioners’ social protection were a violation of the right to social security under Article 12 ESC[79]. In particular, the Committee ruled that certain restrictions such as those related to holiday bonuses, restrictions of pension rights in cases where the level of pension benefits is a sufficiently high one and in cases where people are of such a low age that it is legitimate for the state to conclude that it is in the public interest for such persons to be encouraged to remain part of the work-force than to be retired, did not in themselves constitute a violation of the ESC. However, the cumulative effect of the restrictions would bring about an overall degradation in the standard of living of the pensioners concerned.

It is interesting that the Greek Government tried to conform to the decision of the European Committee of Social Rights by notifying to the Committee of Ministers the measures it had taken to remedy the violations. The measures had a twofold approach: firstly the protection of vulnerable groups and secondly the improvement of the social security system. As to the first pillar, the government asserted that the pensions below 1000 euros would be guaranteed, the Benefit of Social Solidarity (EKAS) which is a non-retributive benefit for the protection of the elderly with low pensions would continue to be granted, a pension of 360 euros would be granted for the non-insured elderly based on certain conditions, while according to Law 4052/2012, the programme “Pensioner’s homecare” had been established. It had also introduced favourable regulations regarding the payment of the Extraordinary Special Property Tax, tax exemptions for certain types of pensions, as those granted to war victims, war invalids, blind persons or invalids and beneficiaries of EKAS, while cuts on pensions were not made if the beneficiary or members of his family receive small pensions, or are invalids[80]. As to the improvement of the social security system, the government tried to counter problems of fraud in social security and incidents of “contribution evasion”

While the measures notified are in themselves welcome, it is doubtful whether they are going to last, especially as there is no sign of overcoming the crisis and Greece is supposed to introduce further measures in view of the ESM assistance package she is going to receive.

Contrary to the hesitant approach of the ECtHR regarding the right to social security in economic emergencies, the Inter-American Court of Human Rights has consistently applied a different approach. In case “Five Pensioners”/Peru[81] the problem was the reduction by 78% of the pensions of the public sector workers while by law and Constitutional Court judgments their pension was planned to gradually equalize the salary they used to receive. The Inter-American Commission on Human Rights claimed the violation of articles 21 (right to property), 25 (right to judicial protection) and 26 (progressive development) of the Convention. The respondent state, for its part, invoked the argument of the state of emergency due to the economic crisis that it faced at that time.

The Court dwelt upon two questions: a) whether the right to a pension could be considered an acquired right, and b) what parameters should be taken into consideration to quantify the right to a pension, and whether it is possible to cap a pension[82].

Although the first question has been answered in the negative by the ECtHR in Koufaki and ADEDY/Greece[83], the IACtHR followed its own path of reasoning, assisted in part by the Constitution of the country and the jurisprudence of its Constitutional Court. Indeed, the former stipulated in its provisions that the “social regimes established for the pensions of public sector employees do not affect legally acquired rights, particularly the right corresponding to the regimes of Decree Laws 19990 and 20530”[84] (these decrees constitute the legal basis for the granting of the pensions in question). Furthermore, the Constitutional Court indicated that, once the requirements for granting a pension set forth in Decree Law No. 20530 have been fulfilled, the employee: “[…] incorporates into his patrimony, by virtue of the express authority of law, a right that is not subject to recognition by the Administration, that is not something that the law grants in some way, that, as has been recalled, arises from compliance with the requirements established by law. Thus, those who were subject to the regime of Decree Law 20530 and who, until the entry into force of Legislative Decree 817 had already complied with the requirements indicated in the norm, that is, they had worked for twenty years or more, have the right to an equalized pension, in accordance with the provisions of Decree Law 20530 and its modifying provisions”[85]. Bearing into consideration the foregoing, the IACtHR concluded that the right to property, stipulated in the ACHR, protects also the right of the applicants to receive an equalized retirement pension in the sense that it is an acquired right[86]. The Court referred also to the limitation clause of the San Salvador Protocol (article 5), holding that, although states may restrict the enjoyment of socio-economic rights in order to preserve the general welfare in a democratic society, and consequently the right to property, such restriction should take place only through the appropriate legal procedure[87]. However, in the instant case no legal process has been applied.

What is most important in the Court’s reasoning is indeed its approach of the right to property in conjunction with the right to a pension. The Court emphasized that from the time that a pensioner pays his contributions to the pension fund, ceases to work for the institution in question and opts for the retirement regime set forth in the law, such pensioner acquires the right to have his pension governed by the terms and conditions established in such law. It is a very important statement, especially if we take into account the adjustments brought about to pension systems all over the world due to the current economic crisis[88]. The Court applied the same reasoning in another case brought before it by the Commission against Peru[89].

Of particular interest is the dictum of the Court regarding the violation of article 26 of the American Convention on Human Rights. The Court did not deny its violation. Instead, it refused to pronounce upon it, stressing that the progressive development of economic, social and cultural rights should be measured in relation to the growing coverage of the right to social security and to a pension of the entire population and not in the circumstances of a very limited group of pensioners[90]. In any case, it did not preclude a prospective violation of the article in the factual and legal framework of another case[91].

 II. Labour rights

The right to a decent remuneration which is enshrined in article 4 of the European Social Charter[92] was examined thoroughly by the ECSR in complaint no. 66/2011. The Committee examined the differentiated reduction of the minimum wage of people under 25 and it concluded that it constituted a violation of the right to fair remuneration[93]. The Committee held that although in certain circumstances it is acceptable to pay a lower minimum wage to young workers, this wage must under no circumstances fall under the poverty level of the country. In the same set of decisions (no 65/2011), the Committee has found further violations of article 4 ESC, in particular para. 4. More specifically, the Greek state by equating the first twelve months of employment in an open-ended contract with a trial period, made dismissal without notice or compensation possible during this period, thus violating directly article 4 para. 4 ESC.

Unlike the decisions on violations of the right to social security, where the Greek Government has introduced measures of remedy, here the Greek delegation before the Committee of Ministers, while accepting the conclusions of the ECSR, it pointed out that the measures were of a provisional nature and that the Greek Government had the firm intention to revoke these measures as soon as the economic situation of the country would allow. However, due to the political and economic constraints, “it was not possible to envisage a set timeframe, although it was unlikely that tangible results in Greece would be apparent before 2015”[94].

In this respect we should also cast an eye on the jurisprudence of the Inter-American Court of Human Rights. The right to salary was central in case Abrill Alosilla et al./Peru[95], regarding the retroactive application of decrees that between 1991 and 1992 eliminated the salary scale system that was in effect. Although the state acknowledged its international responsibility before the Commission (in relation to the right of “amparo” – article 25 ACHR – and not the right to property – article 21 ACHR), the failure to conclude promptly a friendly settlement brought the case before the IACtHR.

In this case, the Court did not make any specific reference to economic, social and cultural rights or the San Salvador Protocol. Nevertheless, the national legal documents examined by the Court (judgments of the Constitutional and Social Law Chamber of the Supreme Court of Justice) and the facts of the case imply the violation of socio-economic rights and in particular the right to receive remuneration.

The issue in question was the repeal, by virtue of decrees with retroactive effect, of the salary adjustment system known as “salary scales”.  This system was not subject to collective bargaining and consisted of the automatic adjustment of monthly remuneration for the personnel at that time denominated as Functionaries and Senior Management, taking as its basis a) the remuneration of the unskilled laborer or lowest position at the company and b) the Salary Scales or Indexes, or Variation Coefficients previously established and assigned to each position. In effect, each time the company increased the salary of the lowest positions as a consequence of a collective bargaining process, by necessity it also resulted in increases for the other positions in the company that could not benefit from that process[96]. The suppression of the “salary scales” system had as a result not only the reduction of salaries but also the retroactive collection of payments[97].

The Court reminded that it has developed a broad concept of property and that it has, through article 21 ACHR, protected vested rights, which are understood as “rights that have become part on an individual’s wealth”[98]. It also emphasized that the principle of non-retroactivity of the law meant that the new law does not have the authority to regulate juridical situations that have been duly consolidated. In this respect the IACtHR observed that the “salary scales” system had generated an increase in wages that had become part of the wealth of the victims, i.e. a vested right. The Court differentiated between the system of salary adjustments, which was not a right of the victims per se, and the salary increases already received that had already become part of the workers’ wealth. In effect, the latter constituted a vested right that was affected by the retroactive application of the law, resulting in violation of the right to property[99].

One should note the “human face” shown once more from the Court, regarding the personal situation of the applicants. In effect, the IACtHR paid particular attention to the fact that all workers had organized their finances based on their salaries and that the salary reduction compromised their opportunity to provide, for instance, economic support to sick family members, while some of them were obliged to sell possessions. It is a human approach that we rarely observe in an international tribunal, even a human rights one[100].

Concluding remarks

Even though international bodies reaffirm in every occasion that retrogression in the protection of economic, social and cultural rights is prohibited and despite the reassurances of the Greek government in one set of complaints before the ECSR that it is doing everything possible to guarantee the protection of vulnerable groups, the situation in Greece is far from stabilising or improving. The new request of assistance before the ESM brings along a new series of measures affecting socio-economic rights (Laws 4389/2016 and 4387/2016) and a great array of privatisations in public assets and organisations that touch upon the minimum core of social rights. A salient example is the announced privatisation of the Athens and Thessaloniki Water and Sewerage Company against the ruling of the Greek Council of State[101] that such a move could put public health at risk due to the uncertainty regarding the quality and affordability of the services[102]. We have a long way ahead until we can declare with certainty that socio-economic rights in Greece enjoy the level of protection they did before the economic crisis.

Notes

[1] Loi travail : 17 % de grévistes à la SNCF pour la première journée de grève illimitée, Le Monde.fr avec AFP, 01.06.2016, http://www.lemonde.fr/economie/article/2016/06/01/loi-travail-debut-d-un-mouvement-de-greve-illimitee-a-la-sncf_4929935_3234.html

[2] Garcia Pedraza P., Crisis and social rights in Europe. Retrogressive measures versus protection mechanisms, Institute for Human Rights, Åbo Akademi University, 2014, p. 18.

[3] See articles 1, 55, 56, 61, 62, 68.

[4] There is a general consensus that most of the human rights norms enumerated in the UDHR have acquired a status of customary law, see in particular, Henkin L., The age of rights, Columbia University, New York, 1990; Meron T., Human rights and humanitarian norms as customary law, Clarendon Press, Oxford, 1989. This argument is further corroborated by the fact that the UN Human Rights Council in its Universal Periodic Review mechanism (established in 2006 by virtue of UNGA res. 60/251) is using as a reference instrument not only the human rights treaties binding upon states and the UN Charter but also the UDHR.

[5] UNGA res. 217 A/10.12.1948.

[6] For this categorization see Karel V. Human rights: A thirty year struggle. The sustained efforts to give force of law to the Universal Declaration of Human Rights. UNESCO Courier, 30:11, Paris, November 1977. Contemporary scholars have overridden this conceptualization (see infra).

[7] Mowbray A., The development of positive obligations under the European Convention on Human Rights, Human Rights Law in Perspective, vol. 2, Hart Publ., Oxford-Portland Oregon, 2004.

[8] Adopted by the World Conference on Human Rights in Vienna on 25 June 1993.

[9] ibid. Part. I, §5.

[10] Proclamation of Teheran, Final Act of the International Conference on Human Rights, Teheran, 22 April to 13 May 1968, U.N. Doc. A/CONF. 32/41 at 3 (1968).

[11] See for instance, General Comment no 9 “The domestic application of the Covenant”, UN doc. E/C.12/1998/24, 3.12.1998: “The adoption of a rigid classification of economic, social and cultural rights which puts them, by definition, beyond the reach of the courts would thus be arbitrary and incompatible with the principle that the two sets of human rights are indivisible and interdependent”, §10.

[12] International Convention on the elimination of all forms of racial discrimination, UNGA res. 2106 (XX), 21.12.1965; Convention on the Elimination of all forms of discrimination against women, A/RES/34/180, 18.12.1979; Convention on the rights of the child, A/RES/44/25, 20.11.1989; International Convention on the protection of the rights of all migrant workers and members of their families, A/RES/45/158, 18.12.1990; Convention on the rights of persons with disabilities, A/RES/61/106, 24.1.2007.

[13] See for an account of the relevant discussion, Craven M., The International Covenant on Economic, Social and Cultural Rights: a perspective on its development, Clarendon Press, Oxford, 1995; Eide A., Economic, social and cultural rights as human rights, in Falk R., Human rights: critical concepts in political science, Routledge, London, 2008, p. 299-318.

[14] See A/RES/6/543, 4.2.1952.

[15] A/RES/2200(XXI) A, 16.12.1966. ICCPR has 167 ratifications, whereas ICESCR 160.

[16] Arts 28 et seq. ICCPR. Similar committees of independent experts have been set up by all core human rights treaties.

[17] Art. 16 ICESCR. The procedure of examination is described in arts 16-23 ICESCR.

[18] “Review of the composition, organization and administrative arrangements of the Sessional Working Group of Governmental Experts on the Implementation of the International Covenant on Economic, Social and Cultural Rights”, Economic and Social Council resolution 1985/17.

[19] Convention for the Protection of Human Rights and Fundamental Freedoms (as amended by Protocols no 11 and 14), Rome 4 XI 1950, ETS 005.

[20] The Council of Europe promotes the indivisibility of human rights and the ECtHR has emphasised already in its very early jurisprudence that “there is no water-tight division” between social and economic rights and civil and political rights, Airey/Ireland, appl. no. 6289/73, judgment 9.10.1979, para. 26. The regional court that has an extensive jurisprudence on economic, social and cultural rights through an expansive interpretation of civil and political rights is the Inter-American Court of Human Rights, see in that respect Saranti V., Economic, social and cultural rights in the Western Hemisphere under the prism of the Inter-American Court of Human Rights case-law, Annuaire International des Droits de l’Homme, VII/2012-2013, p. 515-553.

[21] Greece ratified the European Social Charter on 6 June 1984 by virtue of Law 1426/1984 accepting 67 of the Charter’s 72 articles. The Revised European Social Charter has been ratified on 18 March 2016. Greece has also ratified the Additional Protocol and has accepted the system of collective complaints on 18 June 1998. However, it has not made the declaration that would allow non-governmental organisations to submit collective complaints.

[22] In 2000 the European Parliament approved the Charter which was given legally binding force in 2010 when it was incorporated into the consolidated version of the TEU, by virtue of article 6 TEU that declared that the Charter shall have the same legal value as the Treaties. However, UK and Poland have chosen for a special status through the Protocol on the Application of the Charter of Fundamental Rights of the EU to Poland and to the United Kingdom. Pursuant to this instrument, the ability of the Court of Justice of the EU or any other court or tribunal of Poland or of the United Kingdom is not extended to find that the laws, regulations or administrative provisions, practices or action of Poland or of the United Kingdom are inconsistent with the fundamental rights, freedoms and principles that are reaffirmed by the Charter. Thus the Charter does not create justiciable rights applicable to Poland or the United Kingdom except in so far as Poland or the United Kingdom have provided for such rights in their national law. See http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2007:306:0156:0157:EN:PDF

[23] Vienna Declaration and Programme of Action, Adopted by the World Conference on Human Rights in Vienna on 25 June 1993, §5,  http://www.ohchr.org/EN/ProfessionalInterest/Pages/Vienna.aspx

[24] See for a general discussion Coomans F. (ed.), Justiciability of economic and social rights. Experiences of domestic systems, Intersentia, Antwerp, 2006; de Schutter O., International human rights law, Cambridge University Press, 2010, p. 740-771; Langford M. (ed.), Social rights jurisprudence: emerging trends in international and comparative law, CUP, 2009; Liebenberg S., The protection of economic and social rights in domestic legal systems, in Eide A., Krause C., Rosas A. (eds.), Economic, Social and Cultural Rights. A textbook, 2nd ed., Martinus Nijhoff Publ., 2001, p. 55-84; Matscher F. (ed.), The implementation of economic and social rights: national, international and comparative aspects, N. P. Engel, Kehl am Rhein, 1991; Ramcharan B.G. (ed.), Judicial protection of economic, social and cultural rights, Martinus Nijhoff Publ., Leiden, 2005; Scheinin M., Economic, social and cultural rights as legal rights in Eide A., Krause C., Rosas A. (eds.), Economic, Social and Cultural Rights. A textbook, 2nd ed., Martinus Nijhoff Publ., 2001, p. 29-54.

[25] Dennis M.J., Stewart D.P., Justiciability of economic, social and cultural rights: should there be an international complaints mechanism to adjudicate the rights to food, water, housing and health? 98 AJIL, 2004, p. 462-515 ; Bossuyt M., La distinction juridique entre les droits civils et politiques et les droits economiques, sociaux et culturels, 8 Revue des Droits de l’Homme, 1975, p. 783-820; Vierdag E.W., The legal nature of the rights granted by the International Covenant on Economic, Social and Cultural Rights, 9 Netherlands Yearbook of International Law, 1978, p. 69-105.

[26] For instance, the European Court of Human Rights has repeatedly reaffirmed that states parties enjoy a wide margin of appreciation, when they determine their social policy, especially if their resources are limited and they have to set priorities, see Koufaki and ADEDY/Greece, nos. 57665/12 and 57657/12, decision 7.5.2013, §31 ; Terazzi S.r.l./ Italy, no 27265/95, 17.10.2002 ; Wieczorek/Poland, no 18176/05, 8.12.2009 ; Jahn et al./Germany, nos 46720/99, 72203/01 and 72552/01; Mihaieş and Senteş/ Romania, nos 44232/11 and 44605/11, decision 6.12.2011 ; Frimu and 4 other applications/Romania, nos 45312/11, 45581/11, 45583/11, 45587/11 and 45588/11, decision 7.2.2012, §§40, 42 ; OReilly et al./Ireland, no 54725/00, decision 28.2.2002 ; Pentiacova et al./Moldova, no 14462/03, decision 4.1.2005 ; Huc/Romania and Germany, no 7269/05, decision 1.12.2009, § 64.

[27] See art. 2 §3 ICCPR, art. 13 ECHR, 25 ACHR. The African Charter on Human and Peoples’ Rights does not contain an equivalent provision. However, article 26 of that instrument stipulates that: “States parties to the present Charter shall have the duty to guarantee the independence of the Courts and shall allow the establishment and improvement of appropriate national institutions entrusted with the promotion and protection of the rights and freedoms guaranteed by the present Charter”.

[28] See, van Hoof G.J.H., The legal nature of economic, social and cultural rights: a rebuttal of some traditional views, in Alston P., Tomasevski K. (eds.), The right to food, Martinus Nijhoff Publ., 1984, p. 97-110.

[29] Chapman A., “Violations approach” for monitoring the International Covenant on Economic, Social and Cultural Rights, 18 Human Rights Quarterly, 1996, p. 23-66. Also, Chapman A., Russell S. (eds.), Core obligations: building a framework for economic, social and cultural rights, Intersentia, Antwerp, 2002.

[30] Committee on Economic, Social and Cultural Rights, General Comment no. 3, “The nature of states parties’ obligations (art. 2 §1 of the Covenant)”, UN doc. E/1991/23-E/C.12/1990/8, Annex III, §10.

[31] ibid. §12.

[32] General Comment no. 9, “The domestic application of the Covenant”, UN doc. E/1999/22, §10. See also decisions of national courts that give effect to socio-economic rights such as the right to housing, the right to education and the right to food, Government of the Republic of South Africa/Grootboom and others, Constitutional Court of South Africa, judgment of 4.10.2000; Yated – Non – Profit Organization for Parents of Children with Down Syndrome and 54 Parents/Ministry of Education, Supreme Court of Israel, judgment of 14.8.2002 (HCJ 2599/00); People’s Union for Civil Liberties and another/Union of India and others, Supreme Court of India, judgment of 2.5.2003. Relevant excerpts are quoted in de Schutter O., International human rights law, Cambridge University Press, 2010, p. 751 et seq.

[33] “The nature of states parties’ obligations (art. 2 §1 of the Covenant)”, UN doc. E/1991/23-E/C.12/1990/8, Annex III, §5.

[34] ibid. §9. See also the Limburg Principles on the Implementation of the ICESCR, UN doc. E/CN.4/1987/17, “Although the full realization of the rights recognized in the Covenant is to be attained progressively, the application of some rights can be made justiciable immediately while other rights can become justiciable over time” (principle no 8).

[35] Similarly, despite the absence of a clause on effective remedies in the Convention on the Rights of the Child, the respective Committee has emphasized that effective national remedies must be available to redress violations, underlining that “economic, social and cultural rights, as well as civil and political rights, must be regarded as justiciable”, see General Comment no. 5 “Implementation of the Convention on the Rights of the Child, arts 4, 42 and 44 §6, UN doc. CRC/GC/2003/5, 27.11.2003.

[36] General Comment no. 9, “The domestic application of the Covenant”, UN doc. E/1999/22, §7.

[37] See, for instance, Mayagna (Sumo) Awas Tingni/Nicaragua, 31.8.2001.

[38] Office of the UN High Commissioner for Human Rights, Economic, Social and Cultural Rights. Handbook for National Human Rights Institutions, New York and Geneva, 2005, p. 50.

[39] Art. 2 para. 1 ICESCR.

[40] See General Comment no 3 The nature of States parties’ obligations (art. 2, para. 1, of the Covenant), §10,  “a minimum core obligation to ensure the satisfaction of, at the very least, minimum essential levels of each of the rights is incumbent upon every State party. Thus, for example, a State party in which any significant number of individuals is deprived of essential foodstuffs, of essential primary health care, of basic shelter and housing, or of the most basic forms of education is, prima facie, failing to discharge its obligations under the Covenant”.

[41] Sepúlveda Carmona M., Alternatives to austerity: a human rights framework for economic recovery, in Nolan A. (ed.), Economic and social rights after the global financial crisis, CUP, 2014, pp. 25-27.

[42] In the “Maastricht Guidelines” it is described as “margin of discretion”, Masstricht Guidelines on Violations of Economic, Social and Cultural Rights, Maastricht, January 22-26, 1997, para. 8.[43] General comment No. 3:  The nature of States parties’ obligations (art. 2, para. 1, of the Covenant), Fifth session (1990), UN doc. E/1991/23, para. 9.

[44] See, Press Release no 71/16, Inter-American Commission on Human Rights Expresses its Concern Regarding the Declaration of a “State of Exception and Economic Emergency” in Venezuela, June 1, 2016.

[45] January 22-26, 1997, para. 6. “On the occasion of the 10th anniversary of the Limburg Principles on the Implementation of the International Covenant on Economic, Social and Cultural Rights (hereinafter ‘the Limburg Principles’), a group of more than thirty experts met in Maastricht from 22-26 January 1997 at the invitation of the International Commission of Jurists (Geneva, Switzerland), the Urban Morgan Institute on Human Rights (Cincinnati, Ohio, USA) and the Centre for Human Rights of the Faculty of Law of Maastricht University (the Netherlands). The objective of this meeting was to elaborate on the Limburg Principles as regards the nature and scope of violations of economic, social and cultural rights and appropriate responses and remedies”, Maastricht Guidelines, Introduction. See, https://www1.umn.edu/humanrts/instree/Maastrichtguidelines_.html

[46] Almost 100 families evicted daily in Spain – statistics, Published time: 6 Mar, 2015, https://www.rt.com/news/238349-spain-families-lose-homes/

[47] “Maastricht Guidelines”, para. 9.

[48] CESCR/48th/SP/MAB/SW, 16.5.2012, http://www2.ohchr.org/english/bodies/cescr/docs/LetterCESCRtoSP16.05.12.pdf

[49] Human Rights Committee, General Comment no 29, States of emergency (article 4 ICCPR), UN doc. CCPR/C/21/Rev.1/Add.11.

[50] Nencheva and others/Bulgaria, appl. no. 48609/06, judgment 18.6.2013, paras. 117 et seq.

[51] Nitecki/Poland, appl. no. 65653/01, judgment 21.3.2002.

[52] Alexsanyan v. Russia, appl. no. 46468/06, judgment 22.12.2008

[53] Yordanova and others/Bulgaria, appl. no. 25446/06, judgment 24.4.2012. See also Winterstein/France, appl. no. 27013/07, judgment 17.10.2013.

[54] Kjartan Ásmundsson/Iceland, appl. no. 60669/00, judgment 12.10.2004; Moskal/Poland, appl. no. 10373/05, judgment 15.9.2009, Larioshina/Russia, appl. no. 56869/00, decision 23.4.2002; Kutepov and Anikeyenko/Russia, appl. no. 68029/01, decision 25.10.2005; Budina/Russia, appl. no. 45603/05, decision 18.6.2009.

[55] Stec and others/ the United Kingdom, appl. nos. 65731/01 and 65900/01, decision 6.7.2005.

[56] Larioshina/Russia, op.cit. See, in general, ECtHR, Seminar Background Paper, 25 January 2013, Implementing the European Convention on Human Rights in times of economic crisis, http://www.echr.coe.int/Documents/Seminar_background_paper_2013_ENG.pdf; Steering Committee for Human Rights (CDDH), The impact of the economic crisis and austerity measures on human rights in Europe, Feasibility study, 84th meeting 7 – 11 December 2015, CDDH(2015)R84 Addendum IV, http://www.coe.int/t/dghl/standardsetting/cddh/CDDH-DOCUMENTS/CDDH%282015%29R84%20Addendum%20IV_EN.pdf

[57] “Vorbehalt des Möglichen”. See, for this doctrine in constitutional law Perlingeiro R., Does the precondition of the possible (Vorbehalt des Möglichen) limit judicial intervention in social public policies? NLUO Law Journal, vol. II, issue I, August 2015, pp. 20-45.

[58] Da Silva Carvalho Rico/Portugal, appl. no 13341/14, decision 1.9.2015, par. 44.

[59] Da Conceiçã Mateus and Santos Januário/Portugal, appl. nos. 62235/12 and 57725/12, decision 8.10.2013

[60] Savickas and Others/ Lithuania, appl. nos. 66365/09 et al., decision of 15.10.2013.

[61] The dissenting judges contented that the majority has expanded the scope of the right to property, since article 1 of Protocol No. 1 has never been interpreted “by this Court as obliging member States to provide persons with the right to social security benefits, in the form of disability pensions, independently of their having an assertable right to such a pension under domestic law”, Béláné Nagy/Hungary,appl. no 53080/13, judgment 10.2.2015, joint dissenting opinion of judges Keller, Spano and Kjølbro, para. 1.

[62] Priewe J., What went wrong? Alternative interpretations of the global financial crisis, in UN Conference on Trade and Development – Hochschule für Technik und Wirtschaft Berlin, The financial and economic crisis of 2008-2009 and developing countries, 2010, p. 17-18.

[63] Dullien S., Kotte D., Márquez A., Priewe J., Introduction, in UN Conference on Trade and Development – Hochschule für Technik und Wirtschaft Berlin, The financial and economic crisis of 2008-2009 and developing countries, 2010, p. 1.

[64] Priewe J., What went wrong? Alternative interpretations of the global financial crisis, op.cit.

[65] See for further details and legal documents, http://www.efsf.europa.eu/about/index.htm

[66] T/ESM 2012-LT/en.

[67] See for relevant information and legal documents, http://www.esm.europa.eu/index.htm

[68] Garcia Pedraza P., Crisis and social rights in Europe. Retrogressive measures versus protection mechanisms, Institute for Human Rights, Åbo Akademi University, 2014, p. 7.

[69] Skogly S., The human rights obligations of the World Bank and the International Monetary Fund, Cavendish Publ. Ltd, London/Sydney, 2001.

[70] In October 2009, the incumbent greek government discovered a high fiscal deficit amounting to 15,7% of GDP and a public debt amounting to 129,7% of GDP. These unexpected high numbers resulted in the downgrade of Greece’s sovereign debt by Fitsch, Standard & Poor’s and Moody’s which had as a consequence the inability of the government to receive funding from the financial markets. See for a brief account of the facts, ELSA, International legal research group on social rights, Final report: austerity measures and their implications. The role of the European Social Charter in maintaining minimum social standards in countries undergoing austerity measures, July 2015, pp. 647-648.

[71] The assistance was finally provided on the basis of article 143 TFEU according to which when a member state is in difficulties regarding its balance of payments either as a result of an overall disequilibrium in its balance of payments or as a result of the type of currency at its disposal and where such difficulties are liable to jeopardize the functioning of the internal market or the implementation of the common commercial policy, the Commission shall recommend to the Council the grant of mutual assistance.

[72] ESM Programme for Greece, http://www.esm.europa.eu/assistance/Greece/index.htm.

[73] See in that respect P7_TA(2014)0239, Role and operations of the Troika with regard to the euro area programme countries, European Parliament resolution of 13 March 2014 on the enquiry on the role and operations of the Troika (ECB, Commission and IMF) with regard to the euro area programme countries (2013/2277(INI)).

[74] Law 3833 of 15 March 2010, Law 3845 of 6 May 2010, Law 3847 of 11 May 2010, Law 3863 of 15 July 2010, Law 3865 of 21 July 2010, Law 3866 of 26 May 2010, Law 3896 of 1 July 2011, Law 3986 of 1 July 2011, Law 4002 of 22 August 2011 and Law 4024 of 27 October 2011, Law 4046/2012, 4051 of 28 February 2012, Law 4093/2012 of 12 November 2012, Law 4172/2013. Joint Ministerial Decision 6/28.02.2012

[75] See for a detailed description of the measures adopted, ELSA, International Legal Research Group on Social Rights, Austerity measures and their implications. The role of the European Social Charter in maintaining minimum social standards in countries undergoing austerity measures, July 2015, pp. 646-754.

[76] See for a general reference to Europe, Poulou A., Austerity and European Social Rights: How Can Courts Protect Europe’s Lost Generation?, 15 German Law Journal, 2014, pp. 1145-1176; Jimena Quesada L., Adoption and rejection of austerity measures: current controversies under European law (focus on the role of the European Committee of Social Rights), Revista catalana de dret públic, núm 49, 2014, pp. 41-59.

[77] Committee on Economic, Social and Cultural Rights, General Comment No. 19,The right to social security (art. 9), E/C.12/GC/19, 4.2.2008, par. 15.

[78] Koufaki and Adedy/Greece, appl. no 57665/12 and 57657/12, Decision 7.5.2013, par. 31, 41, 44-46.

[79] Federation of employed pensioners of Greece (IKA-ETAM) v. Greece (no. 76/2012); Panhellenic Federation of public service pensioners v. Greece (no. 77/2012); Pensioner’s Union of the Athens-Piraeus Electric Railways (I.S.A.P.) v. Greece (no. 78/2012); Panhellenic Federation of pensioners of the public electricity corporation (POS-DEI) v. Greece (no. 79/2012); and Pensioner’s Union of the Agricultural Bank of Greece (ATE) v. Greece (no. 80/2012). All decisions on the merits were rendered on 7 December 2012.

[80] Resolution CM/ResChS(2014)7 et seq. adopted by the Committee of Ministers on 2 July 2014 at the 1204th meeting of the Ministers’ Deputies.

[81] C-98, 28.2.2003.

[82] ibid. §95.

[83] With regard to the right to property it stated that it should not be interpreted as giving right to a pension of a determined amount, §33 (with further references to the Court’s case-law).

[84] Five pensioners, op.cit. §97.

[85] ibid. §98.

[86] ibid. §102.

[87] ibid. §116.

[88] See in that respect the judgment of the European Court of Human Rights in Koufaki et ADEDY/Greece, op.cit.

[89] Acevedo Buendía et al. (“Discharged and Retired Employees of the Comptroller”)/Peru, C-198, 1.7.2009.

[90] ibid. §147. See, also the Reasoned Concurring Opinion of Judge Sergio García Ramírez.

[91] However, in case Acevedo Buendía (§106) that followed it did not find a violation of article 26 ACHR, stating that the issue under consideration was not a measure adopted by the State that hindered the progressive realization of the right to pension but it was rather the non-compliance of the state with the payment ordered by the domestic courts. Therefore, the violated rights were only the right to amparo and the right to property. This was a landmark judgment in that the Court, shortly after the adoption of the Optional Protocol to the ICESCR, emphasized the existence of the “principle of non regression” regarding the limitations in the exercise of a right, Burgorgue-Larsen L., Úbeda de Torres A., op.cit. p. 632-635.

[92] With a view to ensuring the effective exercise of the right to a fair remuneration, the Contracting Parties undertake: 1 to recognise the right of workers to a remuneration such as will give them and their families a decent standard of living; 2 to recognise the right of workers to an increased rate of remuneration for overtime work, subject to exceptions in particular cases; 3 to recognise the right of men and women workers to equal pay for work of equal value; 4 to recognise the right of all workers to a reasonable period of notice for termination of employment; 5 to permit deductions from wages only under conditions and to the extent prescribed by national laws or regulations or fixed by collective agreements or arbitration awards. The exercise of these rights shall be achieved by freely concluded collective agreements, by statutory wage fixing machinery, or by other means appropriate to national conditions.

[93] General Federation of Employees of the National Electric Power Corporation (GENOP-DEI) and Confederation of Greek Civil Servants’ Trade Unions (ADEDY) v. Greece (no. 65 and 66/2011), decision on the merits of 23 May 2012, “As such, the provisions of Section 74§8 of Act 3863/2010, and now Section 1§1 of Ministerial Council Act No 6 of 28-2-2012, are not in conformity with Article 4§1 in the light of the non-discrimination clause of the Preamble of the 1961 Charter”.

[94] Committee of Ministers, Resolution CM/ResChS(2013)3, Adopted by the Committee of Ministers on 5 February 2013 at the 1161st meeting of the Ministers’ Deputies.

[95] C-223, 4.3.2011.

[96] ibid. §53.

[97] ibid. §64.

[98] ibid. §82.

[99] ibid. §§84-85. The case was recently closed (21.6.2013), when the last payments were received. The remedies for material and moral damages, costs and expenses, as a whole, amounted to a total of nearly 3 million dollars, see Resolución de la Corte Interamericana de Derechos Humanos, 22.5.2013, Caso Abrill Alosilla y otros vs. Perú, Supervisión de Cumplimiento de Sentencia.

[100] There is no doubt that the IACtHR case-law has been influenced a great deal by the enlightened long-year presidency of judge A.A. Cançado Trindade, who is a dedicated figure of the “human face” of international law, see in particular his book, “Le droit international pour la personne humaine”, Pedone, Paris, 2012.

[101] Judgment no 1906/2014, 28.5.2014.

[102] Realising the human rights to water and sanitation: A Handbook by the UN Special Rapporteur Catarina de Albuquerque, 2014, Book 6: Access to justice for violations of the human rights to water and sanitation, p. 9.

An interview with Yasmine Samir Kelada, Deputy Director at BibAlex Visitors Department

  1. Can you describe your job at the BibAlex?

I am the Deputy Director of the Visitors’ Department of BibAlex.

The Visitors’ Department is the first place a visitor comes in contact with, once in the Library.

I’ve been working here until 2002, a week before the official inauguration; I started as a Tour Guide, then I was promoted to the Head of Tours Section and eventually to the Head of this Department.

The Library’s main complex

 

  1. Can you draw an outline of the aims that led to the building of the new Library in place of the mythical one?

First of all, it was decided to rebuild it very close to the ancient location: actually, the ancient library was about 200m. west to this site.

The façade of the main building is made of Assuan grey granite, round and carved with 120 inscriptions, each one in a different language.

The new Library was meant to be a revival of the ancient one, that was not  only a library at the time: indeed,  that was a centre for learning: among the other structures, there was a zoo, and all scholars came to study here from all over the world.

Grrammars and philologists were in charge of copying, noting and correcting the texts; critical editions were edited and stored: scrolls were about 490.000 in Philadelphus’ times -that is, about 120.000 volumes in actual books-  and when more space was needed  a Serapeus was built.

Therefore, the revival of a new library had to be realized in practice  with the same spirit and role of the ancient one.

We are working to perform this role and, thanks to computer science and globalization, we even succeed today in having a wider one.

The Library Wall

  1. Indeed, what is also interesting to know is what the Library represents nowadays, what it contains today that is different from the ancient times.

Today, the BibAlex actually consists of 3 main buildings: the main building of the Library, a Planetarium and a Conference center.

The main library itself is a huge building in the shape of the rising sun, to symbolize the sun rising from the sea as a symbol of a non-stop knowledge, a daily renewal of knowledge in the shape that Snowhetta, the Norwegian enterprise that  won the contest for the design, planned in 1989 ; the library itself had a reading area of 20,000 m2 , an open reading room for 2000 readers that is the widest reading area in the world; is has seven stores, resulting in a vast light-filled reading room with a glass ceiling that slopes towards the Mediterranean. Finally, it is meant to hold eight millions of books.

We increase books by acquisition and donation; we work on acquiring books on different scales: starting from Egypt and proceeding on different circles, first the Middle East, then the Mediterranean, Africa and eventually the whole world.

The second building is  the Planetarium Science Center, which is a centre  where we have a 3D room to shot scientific movies, both for adults and children. We also have a centre to encourage children to love science, where they can have all different experiments, in Physics, Science, Chemistry and this is where they start to love science, because they work it, they produce results with their hands. We have special workshops that work on special programs, in accordance with the school requests during school time, while in the summer we have  full loaded centers with hundreds and hundreds of children coming to join the summer programs.

The third building is the Conference Center, which is a huge center that has several holes for different facilities, and these holes can host different kinds of events: seminars, conferences, concerts, all equipped with the  complete facilities up to the highest international standards.

The Library’s Main Study Room

 

 

  1. What about the exibitions the BibAlex hosts?

In fact, within these three  buildings we have four museums: the Sadat Museum, the Manuscript Museum, the Antiquities Museum and the History of Science Museum.  We also host fifteen permanent exhibitons: three heritage collections – the Arab Folk Art; the Arab-Muslim Medieval Instruments of Astronomy and Science; the Bulaq Press. Three personal collections: the Awad Collection on Alexandria, the Shadi Abdel Salam Exhibition, regarding the famous Egyptian film-maker; the Arabic Calligraphy Collection. And eventually eight Exhibitions of contemporary visual artists.

Last, but not least, “Our Digital World” showcases BibAlex most exciting digital projects.

The exhibition includes projects documenting the history of modern Egypt, for example the digital archives of former presidents Naguib, Nasser and Sadat; scientific projects as the Encyclopedia of Life (EOL); digitization projects of precious books. There is also a section with computers to give the public the opportunity to explore the collection of the digital initiatives, and there are short movies on each project in different languages.

Besides, we have  several centres covering different cultural aspects, such as the Alexandrian- Mediterrranean studies, the Islamic studies, the Coptic studies, the Hellenistic studies, that are all on our website for people to look up.

The BibAlex website contains all the detalied info, and is a very user friendly website that is constantly updated and re-designed, where perspective and virtual visitors can easily plan their tour and find all the information they need.

Drawings

  1. Could you highlight other outstanding aspects in which the BibAlex interacts with the city?

Of course it goes along with different ages and interests. We have models  for  different political aspects: Activities for the youth are especially wide: for example we can involve the youth to express themselves about  the problem of the Nile, or the problems we suffered after the Revolution; besides, children –apart fron the scientific field-  have their own  library.

We not only serv tourist with guided tours, but also have tours for children, and different competitions about knowing Alexandria better, or knowing the Library better.

We have special events for the very young, under 6 years; we try to educate and improve their behaviour  regarding the city, such as how to keep Alexandria clean, or to perform very simple etiquette sessions; we try to cover as wide aspects as we can, which means that even the Department  of visits is not  involved with visits only. This means we try to reach also schools with very primitive and limited facilities,  which cannot reach the BibAlex, so what we do is to take the Library there, show a presentation and a movie about the Library that  orient them about it, and we still make a presentation in cooperating with other library departments, such as the Calligraphy, so they can learn very basic elemets of calligraphy, such as the Pharaonic letters. We try to work as wide as we can to develop the young generation’s  knowledge of the past and their cultural identity.

  1. What about the aspects the BibAlex addressed to the adults, such as concerts, exhibitions – I am thinking for example of the MET broadcasting on Saturdays, and of similar events as well.

This part is  actually wide, as artists come to the BibAlex for concerts and exhibitions but also for workshops,  so the cultural part addressed to the adult public is really wholly covered under a wide range of aspects.

The Great Hall, the main auditorium, can comfortably accommodate more than 1600 persons. It is used for international conferences, symposia, meetings, seminars, concerts, presentations and performances.

The Great Hall is equipped with complete audio-visual devices.

The Small Theater, accommodates about 200 guests. It usually hosts smaller conferences, seminars ,theatrical plays and chamber music.

The Delegates Hall has 100 seats and fully equipped tables, with internet connection,  simultaneous interpretation head phones and a microphone.

The Lectures Hall has a theater-style setting with armchairs and folding tables. It is suitable for international conferences, symposia, lectures, seminars and presentations, and can host around 200 people.

Besides, there are five seminar rooms in the Conference Center, and one seminar room in the main Library building.

  1. Another area widely covered concerns congresses and meetings – I see now the Cardiology Seminar for example, and in October I personally experienced the final meeting of a two-year programme concerning Egypt Culture and Heritage, held in collaboration with the EU.

This underscores another important role the BibAlex plays, that is the link with world cultural and economical Institutions.

Yes, we basically work on the idea that the BibAlex is the window from Egypt to the world and viceversa, from the world into Egypt.

We are not closed to an area, but we have  links with libraries all over the world; the widest we can go, the better; we have a lot of agreements, with a lot of international associations that help the library in projects and funding.

The link is not only economical, but people are willing to come to work for the project itself, the documentation, the digitization.

  1. Could we say the BibAlex has an international staff?

Well it is not exactly the idea of an international staff, as people come to work on projects and then go when the project is accomplished; this develops within the different projects and it is again very wide, covering  many different nationalities and research centres. Actually we have connections all over the world with the most important libraries, mainly in terms of digitalization, but also the idea of being connected in terms of human resources is very alive –  the interest in concretely come and see, and reproduce, what the Library represents is very attractive for people abroad.

Our Library is a bench mark for people from abroad, and even working as a volunteer here means playing a great role in the library, gaining a lot of experience; I can see it in interviews from people coming to the Library, they really fancy coming here and work for this  outstanding institution, so we always look forward to having  volunteers from abroad, and even if they are not convenient on a Department we  try and succeed in finding them a suitable place.

Beacause the volunteers have a lot of energy, they are very willing to learn, and they are  extremely motivated, so we give them a chance even if it’s not particularly convenient for the BibAlex.

  1. One last question concerns the future projects planned now in the BibAlex.

Each Department in the BibAlex has  its own projects for the future; it’s impossible to identify a main one, and I would be unfair quoting one, as they are all working hard and enthusiastically about their  projects. Moreover, each project is deepening and  digging back to widen its  subject. The library is  constantly renewing and updating its subjects.

  1. Thank you Yasmine, for your time and the precious information. I am sure our audience will be interested in deepening  the  subject of BibAlex and in time  also to visit Alexandria and this  unique cultural site.

Thanks for the interest expressed! BibAlex is always  glad to spread  news about its activities, to attract new Institutions and  to start new partnerships all over the world.

The Planetarium

 

 

 

More details about BibAlex can be found here:

http://www.bibalex.org/en/default

http://snohetta.com/projects/5-bibliotheca-alexandrina

https://sv.wikipedia.org/wiki/Serapeion

 

All images courtesy from:

http://www.bibalex.org/en/MediaGallery/Default/bacomplex

 

The EU’s Open Arms and Small States

Recent events notwithstanding, all things considered, the European Union has proved to be a brilliant success along several dimensions. This is why there are still several countries waiting outside the gates aspiring to membership while only the British are considering exit as if to confirm French President Charles de Gaulle´s initial doubts about British membership. And this is why US President Barack Obama encourages British voters openly to say No to Brexit in the upcoming referendum in June 2016, warning them that Brexit may weaken the “special relationship” between the Britain and the United States.

Peace, prosperity, and open arms

Recent troubles notwithstanding, I see three main reasons why the EU deserves to be regarded as a brilliant success: Peace, prosperity, and open arms.

First, the EU has helped keep the peace in Europe since 1945, the longest continuous period of peace and harmony in Europe since time immemorial except for some skirmishes – some major ones, it is true – in former communist countries in the Balkans. Chancellor Helmut Kohl, one of the chief architects of German reunification as well as of European unification, put the matter well when he declared that Germany wanted to share her sovereignty and her fate with her European neighbors lest her neighbors never again need to fear German belligerency.

Second, the EU has promoted prosperity on the continent by engineering a major economic and social transformation with an unwavering emphasis on human rights. European cities from Helsinki to Lisbon – and, yes, also from Athens to Dublin – have been transformed before our eyes, and the same applies to the European countryside. The EU´s strong emphasis on human rights has involved, among many other things, the abolition of the death penalty throughout the union membership. The Americans have begun to take notice: the number of death sentences and executions in the United States has dropped significantly since the mid-1990s.

Third, with open arms, the EU has welcomed formerly autocratic countries back into the European fold – first, Greece, Portugal, and Spain on the southern fringes of Europe, and then the former communist countries in East and Central Europe – enlarging Europe, making it whole. Thus far, only Iceland, Norway, and Switzerland have opted to stay outside the union. Switzerland is a chapter unto itself, having joined the United Nations as late as 2002. Norway is also a special case in that its voters have twice turned down membership in national referenda against the will of the country’s main political parties and interest organizations, a remarkably inward-looking attitude on the part of Norwegians. I will discuss Iceland toward the end of the article.

To continue with the EU’s open arms, Catalonia is eager to join – or rather, remain in – the EU, as is Scotland, after achieving independence. About a half of the Catalan population wants independence from Spain because many of them feel treated like a minority within Spain without full respect and full rights. The government in Madrid threatens to keep an independent Catalonia outside the EU, a threat that contradicts the EU´s open-arms policy and is, therefore, likely to prove empty. The Scottish situation is different. There, also, about a half of the voters want independence, primarily because they want Scotland to be more like Scandinavia, thus setting England free to become even more like the United States. Scotland joined the United Kingdom in 1707 primarily to gain access to a much larger market. Today, as a member of the EU, Scotland enjoys such access and, therefore, does not any longer need to be part of the UK for reasons of trade even if most of Scotland´s trade is still with England. The threat from Westminster that Scotland will lose its EU membership if it leaves the UK sounds hollow because, again, it is incompatible with the EU´s open-arms policy. The threat from Westminster appears also a bit comical in view of the fact that the Conservative government is just about to hold a referendum that may take the UK out of the EU, a result that would almost surely encourage demands for immediate Scottish independence to enable Scotland to remain in the EU.

In both Catalonia and Scotland, the prospect of continued EU membership holds the key to independence. Without membership, many of those who advocate independence would have doubts as they would fear weakened trade relations as President Obama has warned British voters. As members, however, Catalonia and Scotland, would have continued access to Spanish and British markets through the EU, assuming the UK decides against leaving the EU.

Union of small European states

With time, the character of the EU has changed as it has developed into a union of small European states. If Catalonia achieves independence and joins the EU, it will become the typical EU member in terms of population size. Of the 29 members, there will be 15 countries larger than Catalonia and 13 smaller countries. This shows how unreasonable it is to maintain that Catalonia or Scotland are too small to stand on their own feet as EU members. Denmark and Finland are the size of Scotland and smaller than Catalonia. Denmark has been an EU member since 1972 as well as a de facto subscriber to the euro and Finland has been a member of the EU as well as of the Economic and Monetary Union (EMU) since 1994. If Denmark and Finland were able to do so well by their EU membership, there can be no reasonable doubt about the ability of Catalonia and Scotland to do likewise.

With more small members on the horizon, there is reason also to believe that the common interests of small countries will weigh more heavily in EU policy making and institutions in the future. Clearly, Europe has its political disagreements separating left from right, north from south, east from west, and so on, as does the US and other countries. Even so, Europe´s advanced social model, harking back to Chancellor Otto von Bismarck who can be said to have introduced the first rudiments of the German welfare state in the 1880s, faces no serious challenge within Europe. This makes Europe quite different from the US where the more limited and less ambitious welfare state legislation launched by Democratic Presidents Franklin D. Roosevelt, John F. Kennedy, and Lyndon B. Johnson is under attack by its Republican opponents in Congress, a situation that seems unthinkable in Europe.

The strong parallel emphasis on efficiency and fairness is, as I see it, the key to the economic and social advances accomplished thus far by the EU. This helps to explain the continued attractiveness of EU membership to all but the most eccentric and inward-looking countries in Europe. Further, the minority of voters against EU membership within individual countries includes European advocates of the US Republican extremism that now, with the 2016 US presidential election approaching, seems to threaten the cohesion if not the existence of the Republican Party.

Three comparisons

The weaknesses that have emerged in modern America – lack of trust, imploding politics, stagnant wages, and increased inequality – mirror the strengths of the European model. In his seminal book Bowling Alone, Robert Putnam charted the collapse of trust in American society, a gradual process the way Putman describes it.

Let me suggest three related phenomena to highlight some of the current differences between the US and Europe.

  • American workers spend 1,800 hours per year at work compared with 1,400 hours in Denmark and Germany, 1,500 in France, 1,600 in Sweden and Switzerland, and 1,700 in UK (source: The Conference Board. 2015. The Conference Board Total Economy Database). Why? One plausible explanation for these differences is that US workers need to put in long hours to compensate for the lack of social security that Europeans can take for granted (Gylfason, 2007). Unlike Americans, Europeans have seen their economic wellbeing rise through higher incomes as well as less work.
  • In 1960, the average American was 3 cm taller than the average German. Today, the average German is 3 cm taller than the average American as documented in a series of works by John Komlos and his associates (see, e.g., Komlos and Baur (2004) and Komlos and Lauderdale (2007)). Why this reversal? A likely reason seems to be that tens of millions of US citizens have been left behind, in poverty and without adequate social insurance, unable even to attain normal physical stature, thereby dragging down – or, more precisely, slowing down the natural advance of – the average height of the adult population in the US (Gylfason, 2007). If this interpretation is correct, it constitutes a devastating case against inequality of incomes and wealth on economic grounds quite apart from the ethical issues at stake.
  • New research by Nobel-Prize winning Scottish economist Angus Deaton and Anne Case, both at Princeton University, shows that middle-aged non-Hispanic white Americans have faced declining life expectancies since 1999 due to a sharp rise in life-style related diseases and suicides (Case and Deaton, 2015). Declining life expectancies are unheard of in modern times except in Russia after collapse of communism and in Africa due to public health disasters, especially the HIV/AIDS epidemic. The lives thus lost in the US are almost as many as those lost to the HIV/AIDS epidemic since 1981 (0.5 million vs. 0.65 million).

Expansion fatigue

There is no denying that the EU presently faces serious difficulties, some of its own doing, some not, including the recent torrent of Syrian refugees into the EU. While the EU cannot be blamed for the influx of refugees, the extent to which the EU bears itself some of the blame for some of its other current problems is debatable. The EU has looked the other way while anti-democratic tendencies have intensified in Hungary and, more recently, also in Poland. The EU could have reacted by, for example, imposing economic sanctions by withdrawing financial support from Hungary but chose not to do so. Likewise, the EU seems not to have done much to try to rein in rampant corruption in Bulgaria and Romania. The economic troubles of Greece can be said to follow in part from the EU´s flawed fiscal and financial architecture, a problem well understood from the inception of the euro but one which the EU has yet to address satisfactorily. This list could be extended. In view of these issues, it is understandable that some older EU members are inclined to think that now is a good time to slow down the geographic expansion of the EU by sharpening the focus on deepening European integration while putting widening on hold for the time being. Even so, EU would benefit from the admission of new members such as deeply democratic Catalonia and Scotland. If they declare independence, the EU will almost surely welcome both of them with open arms. This would lend an even stronger voice to advocates of the EU as a union of small European states eager to advance economic efficiency and social justice side by side.

Back to Greece. Much has been made recently of Greece´s inability to overcome her financial predicament by devaluing her currency. The argument is that macroeconomic adjustment by other means within the confines of the euro is bound to be more costly than devaluation of the drachma would have been. This may well be true as far as it goes. Even so, several euro countries have managed a significant adjustment in recent years, including Ireland, Portugal, and Latvia where, in 2014, unemployment was in the range between 11% and 14% of the labor force compared with 26% in Greece. In 2007, all four countries had unemployment rates between 5% and 8%. The experience of Ireland, Portugal, and Latvia shows that adjustment by other means – fiscal restraint, wage cuts, and more, sometimes referred to as an internal devaluation – with the euro in place is possible even if it can be quite painful. None of these countries seriously considered leaving the euro zone, nor did Greece. Comparisons of the euro with the Gold Standard are misplaced because the European Central Bank can devalue the euro if it wants to; in fact, the ECB did so recently.

Iceland and the EU

Iceland became a founding member of NATO in 1949. The decision to join was not based on detailed benefit-cost analysis. Details did not matter. Rather, the Icelandic parliament decided that NATO is a club where Iceland inextricably belongs. In other words, Iceland´s parliament decided to share Iceland´s fate with that of other members of the alliance, including most of Iceland’s closest friends and allies. No referendum was held. Profiteering from Icelandic NATO membership came later. The defense agreement between Iceland and the US is considered to have generated incomes equivalent to about 2% of GDP per year from the 1950s until 2006 when the US government unilaterally closed the NATO base in Iceland against the will of the Icelandic government.

Similarly, the Icelandic parliament´s decision to apply for EU membership in 2009 was not based on an explicit benefit-cost analysis. The principle is the same as before: those in favor of membership view the EU as a club where Iceland belongs if only because all of our closest allies except Norway are members. Further, in fact, I believe Iceland should join the EU even if it could be demonstrated that the costs of membership outweigh the benefits, but then, of course, it is impossible to assess the monetary value of political benefits.

From the early 1990s until the crash of 2008 opinion polls showed that Icelandic voters were consistently albeit marginally in favor of EU membership whereas political parties, subservient to the oligarchs they had created by granting them virtually free access to Iceland’s valuable fish resources, and interest organizations stood shoulder-to-shoulder against membership. Here the situation was diametrically opposite to that of Norway. Up against the wall after the crash, Iceland filed an application for membership in 2009. The application could be understood as a way of saying to the rest of Europe: Please excuse us for having permitted our banks to separate you from so much of your cash, but from now on we shall abide by the discipline required by EU membership. With the political parties held primarily responsible for pushing Iceland off the cliff in 2008 through their crony privatization of the banks during 1998-2003 back in power in 2013, an attempt was made to withdraw the application in 2012 as if to say: We did not mean to say we are sorry, we were just kidding. This is, however, a controversial interpretation. While many Icelanders apparently sensed a collective guilt about having voted for politicians who through the corrupt privatization of the banks paved the way into the abyss in 2008, others had no such feelings of guilt, blaming the crash on the bankers or the politicians or even on foreign conspirators. Anyhow, the attempt in 2012 to withdraw the EU membership application failed. Specifically, parliament put in the membership application in 2009 whereas the foreign minister, not parliament, attempted to pull out unilaterally in 2012, a pullout considered invalid by the EU because an individual minister cannot undo a formal decision by parliament. Hence, Iceland’s application remains on ice, like the Swiss one from 1992, waiting to be reactivated by a new parliament which will then put the negotiated membership agreement before a national referendum as promised by parliament and as required by the new constitution that was approved by 2/3 of the voters in 2012 and awaits ratification by parliament.

Recent developments in Greece, Ireland, and Spain make Icelandic accession to EU membership a harder case to sell. This helps to explain why public opinion has swung against membership since 2008 even if developments in Baltic and Balkan countries suggest a different conclusion. Estonia, Latvia, and Lithuania joined the EU in 2004 and by now all three use the euro. Croatia became the EU´s 28th member in 2013, ten years after filing its membership application. Undeterred by events in Greece, Albania became an official candidate for accession to the EU in 2014. Bosnia and Herzegovina applied for membership in 2016.

Another reason for the change in public sentiment in Iceland is that some Icelandic politicians tried to deflect their own responsibility for Iceland´s home-made crash by absurdly blaming it on foreigners and whipping up immigrant-unfriendly chauvinism in Icelandic politics for the first time in history. In terms of economic damage relative to national economic output as well as in terms of fiscal costs, Iceland´s crash was among the greatest ever recorded (Laeven and Valencia, 2012). For example, the damage inflicted on foreign creditors and shareholders was greater than anywhere else relative to the size of the Icelandic economy.

What would be the main benefits and costs of EU membership? The economic benefits are clear even if European Economic Area membership from 1994 has delivered many of them already. Yet, several significant benefits are still missing.

  • Many Icelanders see the adoption of the euro as a key benefit in view of Iceland poor record of monetary management which has allowed the Icelandic króna to lose 95.95% of its value vis-à-vis the Danish krone since 1939. Quite apart from the general philosophy behind the EMU, small countries can benefit from outsourcing the least successful parts of their national policy-making just as they should resist outsourcing their most successful procedures.
  • The Common Agricultural Policy is far less expensive for Europe´s consumers and tax payers than is domestic farm protection in Iceland as has always been the case. Thus, while producer support in the EU decreased from 39% of gross farm receipts in 1986 to 18% in 2014, it decreased from 76% to 48% in Iceland during the same period (OECD, 2015).
  • In view of Iceland´s checkered history of oligopolies and lack of competition in a number of areas, including agriculture, banking, fisheries, and trade, the EU´s Competition Policy and associated monitoring and surveillance could offer significant benefits to Iceland.
  • The Common Fisheries Policy constitutes a problem for Iceland, however, that needs to be solved. Iceland needs to understand and respect that the EU was built on the fundamental premise of the original European Coal and Steel Community stipulating joint management of Europe’s natural resources. At the same time, the EU needs to understand Iceland´s significant dependence on her fisheries – a dependence that concerns the national economy of Iceland as a whole and not just local fishing communities as in the rest of Europe. The EU´s toleration of inefficient fisheries policies, tacitly justified by viewing fisheries as a fairly unimportant regional concern, cannot be accepted in Iceland where fishing remains a macroeconomic concern. Even so, Iceland needs a major overhaul of its fisheries management regime which the Supreme Court of Iceland ruled discriminatory and hence unconstitutional in 1998, a verdict confirmed by the United Nations Human Rights Committee in 2007 (Gylfason, 2009a). In the national referendum on a new post-crash constitution for Iceland, 83% of the voters declared support for a provision stipulating national ownership of natural resources, including full charge for the right to fish in Icelandic waters in keeping with the user-pays principle of environmental policy now openly advocated by the World Bank and the IMF as the best way to deal with climate change (Lagarde and Yong Kim, 2015). Whereas Norwegian tax payers have been able to claim about 80% of Norway´s oil rent from the outset, 90% of the fisheries rent in Iceland still accrues to the vessel owners, Iceland’s answer to Russia´s oligarchs (Thorláksson, 2015).

 

Conclusion

Small can be beautiful. On average, small countries tend to have higher per capita incomes than large ones because various benefits of small size, including cohesion and homogeneity, seem to outweigh the diseconomies of small scope and scale and small pools of talent (Alesina and Spolaore, 2003; Gylfason, 2009b). The EU can expect to benefit from welcoming more small states as members. National boundaries matter less and less when cross-border trade is free. This is why the independence aspirations of Catalonia, Scotland, the Faroe Islands, and others need not be viewed with alarm. Along European lines, ill-designed national boundaries outside Europe would be easier to redraw if trade were free as in Europe, supported by social efficiency, freedom, fairness, and respect for human rights.

 

 

References

Alesina, Alberto, and Enrico Spolaore (2003), The Size of Nations, MIT Press, Cambridge, Massachusetts.

Case, Anne, and Angus Deaton (2015), “Rising Morbidity and Mortality in Midlife Among White Non-Hispanic Americans in the 21st Century,” PNAS, National Academy of Science.

Deaton, Angus (2013), The Great Escape: Health, Wealth, and the Origins of Inequality, Princeton University Press, Princeton and Oxford.

Gylfason, Thorvaldur (2007), “Why Europe Works Less and Grows Taller,” Challenge, January-February, 21-39.

Gylfason, Thorvaldur (2009a), “Hvað segja lögin: Sameignarauðlindir eru mannréttindi” (What Does the Law say? Common Property Resources as Human Rights) in Ragnarsbók (Festschrift for Ragnar Aðalsteinsson), Icelandic Literary Society, Reykjavík, 497-522.

Gylfason, Thorvaldur (2009b), “Is Iceland too small?,” VoxEU.org, 19 August.

Komlos, John, and Marieluise Baur (2004), “From the Tallest to (One of) the Fattest: The Enigmatic Fate of the American Population in the 20th Century,” Economics and Human Biology, Vol. 2, No. 1, March, 57-74.

Komlos, John, and Benjamin E. Lauderdale (2007), “The Mysterious Stagnation and Relative Decline of American Heights after c. 1960, Annals of Human Biology, Vol. 43, No. 2, March-April, 206-15.

Lagarde, Christine, and Jim Yong Kim (2015). “The Path to Carbon Pricing,” Project Syndicate, 19 October.

Laeven, Luc, and Fabián Valencia (2013), “Systemic Banking Crises Data Base,” IMF Economic Review, Vol. 61, 225–270.

OECD (2016), Agricultural Policy Monitoring and Evaluation 2015, OECD, Paris.

Putnam, Robert (2000), Bowling Alone, Simon and Schuster, New York.

Thorláksson, Indridi H. (2015), “Veiðigjöld 2015. Annar hluti” (Fishing Fees 2015. Part Two).

 

Europe’s Constitutional Law in Times of Crisis: A Human Rights Perspective

In this paper, we aim to survey representative constitutional amendments in the European Union’s (EU) area, whether attempted or accomplished, as well as significant adjudications by constitutional bodies. Then, we proceed to assess these legal phenomena in light of human rights jurisprudence. Pivotal reference in our work is the recently released 7th volume of the Annuaire international des droits de l’homme (Athens: Sakkoulas, December 2014), edited by G. Katrougalos, M. Figueiredo and P. Pararas under the aegis of the International Association of Constitutional Law. Not only does this volume comprise the work of some of Europe’s noted constitutionalists, it also addresses the constitutional matters central to this paper in light of human rights jurisprudence, which is the area of expertise of one of the paper’s authors, i.e. Ágúst Þór Árnason, and the area that the other author, Giorgio Baruchello, has construed axiologically as a pivotal instantiation of civil commons, i.e. “all social constructs which enable universal access to life goods”. Have European constitutions continued to function qua civil commons in the crisis years? That, at the deepest level of value scrutiny, is the question that our joint survey and analysis aim to answer.

Continue reading Europe’s Constitutional Law in Times of Crisis: A Human Rights Perspective

Pieter Bevelander & Bo Petersson (eds.), Crisis and Migration. Implications of the Eurozone Crisis for Perceptions, Politics, and Policies on Migration (Lund: Nordic Academic Press, 2014)

 

The volume addresses some of the consequences for the European Union (EU) of the prolonged economic crisis resulting from the 2008 implosion of Wall Street’s financial wizardry. One particular consequence, or area of concern, is at the heart of the essays included in the volume, i.e. migration, meaning chiefly, though by no means exclusively, the movement of people from outside the EU into the EU. Albeit clear, relevant and useful statistics are offered both in the introductory chapter by the book’s editors (pp. 9-24) and in the second chapter, penned by economics professor T. Hatton (pp. 25-47), theoretical issues of socio-cultural perception are given more room in the book’s studies than empirical issues of demographics, econometrics and/or specific legislative acts.

  Continue reading Pieter Bevelander & Bo Petersson (eds.), Crisis and Migration. Implications of the Eurozone Crisis for Perceptions, Politics, and Policies on Migration (Lund: Nordic Academic Press, 2014)

R. Bohlin, De Osynliga. Det Europas fattiga arbetarklass; M. Linton, De hatade. Om radikalhögerns måltavlor; B. Elmbrant, Europas stålbad. Krisen som slukar välfärden och skakar euron (All titles by Atlas, Stockholm, 2012)

 

The feminist journalist Rebecca Bohlin has looked into the working and living conditions of the least paid workers within the service sector, although reminding to us that many other jobs in different sectors meet similar problems. She has met cleaners, kitchen attendants and cashiers in Stockholm, London, Hamburg and at the same time has interviewed scholars and as well politicians and union representatives about the rise in income inequality and the worsening of working conditions, across Europe and in Sweden.

And to Sweden indeed is devoted the first chapter (Hur mår RUT?). The question of rising inequalities has become hot after 2007, when tax deductions for domestic service (RUT) were introduced, with the argument that the black market was to be stopped. In fact, however, according to the unions and to some research, the outcome has been an increasing in the number of workers (often asylum seekers or anyway migrants, very often women) exploited and with no safeguard: their formal job contract is legal, but their actual working conditions are definitely different, and for the worse. Yet in Sweden, as Bohlin acknowledges, living conditions of the low-paid workers are better that in most other countries.

In the second chapter (Så pressas lönerna neråt) Bohlin analyzes, again through witnesses and interviews, migration policy at the EU level and in some of its member States. She insists on the paradox of a rhetoric stressing the need of labour force from outside Europe, in order to face demographic challenges and to make companies more “globalized”, while at the same time the actual policy is based on a military defence of the “fortress Europe”, at the cost of thousands of human lives every year. And those who succeed in reaching Europe are often exploited both economically and, when women, sexually. And that even in a country that is a world master in workers’ rights and gender equality such as Sweden.

How are trade unions tackling this backward trend to a degree of workers’ exploitation similar to that in the 19th century? Around this unavoidable question the third chapter (Facket famlar efter en ny solidaritet) is built. The answer is not at all self-evident; on the contrary, here one goes on attempt by attempt. However, what comes out from the talks that the author has had with union leaders and members, in Sweden and in the UK, as well as with scholars, is that a trade union like the Swedish one, service-oriented, is not well-equipped to face the challenges that labour movements all over the world have to meet. More interesting it seems the experience of the “Social Movement Unionism”, a strategy that has been tested in South America and is made up of a mix of mobilization, learning, dialogue with local society, negotiations – and protest actions. Exactly what many all over Europe – either workers or unemployed, migrant or local – call for.

 

An even darker side of Europe is the subject of Magnus Linton’s work, that he describes in his Introduction as a book on “majorities and minorities, absolutism and relativism, boarders and lack of them, fantasy and reality”. The author, well-known in Sweden for his reports after the carnage in Utøya, has carried out an inquiry about right-wing radicalism in three European countries: Hungary, the Netherlands and Norway, moving from the awareness that the current economic crisis increases its appeal. Linton has met the main targets of xenophobic and neo-nazi groups, respectively Roma people in Hungary, muslims in the Netherlands and left-wing intellectuals in Norway. The first section (Parasiterna), after reminding shortly the persecution of Roma in history (culminating with their, neglected, massacre during World War II) and the recent deportation of Roma in countries such as France, Italy and Sweden, introduces the reader to the disturbing world of the Hungarian neo-fascist party Jobbik (Movement for a better Hungary), whose programme is openly “roma-centered”, so to say, and that in 2010 established itself as one of the main political forces in the country with 17% of votes. Jobbik’s growing influence resulted in a situation that Linton, with reference to what happened in the municipality of Gyöngyöspata, tells in the following way: “in 2011 in the middle of Europe fascists in uniform marched and families belonging to one of the poorest and most persecuted minorities in the continent were forced to escape what otherwise would have turned into a pogrom”. And Gyöngyöspata was only the beginning. However, the political scientist Zsolt Enyedi, interviewed by Linton, points out that these developments in Hungary were at the same time astonishing and predictable. Their roots can be found in a historical process starting from the fall of the Berlin wall; since then, populism has been a constant presence in Hungarian life and in the end has exploded due to the economic crisis. The fact that in 2010 the nationalist and authoritarian party Fidesz won 2/3 of the votes has made the situation even worse and transformed Hungary into a stronghold of radical Right in Europe.

Another country, another scapegoat: in the Netherlands, as it is well-known, the thesis that “our” problems could be solved if only “we” got rid of Muslims has found one of its most prominent champions, i.e. Geert Wilders, leader of the Freedom Party and major pointer for Dutch politics for years (see the section: Ockupanterna). Though making sure to distinguish himself from people like Anders Berg Breivik (who pointed at Wilders as his ideological source of inspiration) by stressing his own democratic attitude, Wilders has steadily run down Islam, equating it with Fascism. Together with Pim Fortuyn (murdered in 2002 by a left-wing extremist), he has personified the idea that multiculturalism is a luxury only the privileged few can afford and has transformed the Netherlands into the headquarters of islamophobia in Europe.

The Dutch historian Thomas von der Dunk, here quoted, urges to take into account that politics’ highest aim is economic security, as well as the capability for society to accept cultural uncertainty; but when the former decreases, then the need for a strong cultural identity rises.

Roma people and Muslims are easy scapegoats in a continent affected by geopolitical and economic turbulences; but how came that in the rich and enlightened Norway a right-wing extremist killed more than 70 young left-wing activists? What Berg Breivik aims at with his double attack (a bomb in Oslo and the carnage on the Utøya island) was, as Linton explains, to murder at the same time three generations of “betrayers” (hence the title of the section, Förrädarna), i.e. three generations of Social Democrats: the forthcoming (the young activists who met in Utøya), the present (the governmental headquarter in the capital), and the former (Gro Harlem Brudtland, former prime minister, who escaped assassination in the island due to a delay in Breivik Berg’s plan).

What has been betrayed are Norwegian culture and identity, quite obviously. Breivik Berg defines “cultural Marxism” what could otherwise be summarized as “politically correct”, in other words the idea that there are some topics that cannot be questioned, above all feminism and multiculturalism. Linton points out that coinciding with the perhaps unstoppable march of right-wing extremism in Europe is the discontent caused by what has been perceived as the hegemony of political correctedness, which has become more and more centered upon universities. After all, right-wing radicalism is not interested in discussing rationally a question (which is supposed to be the academic approach) but, on the contrary, in imposing its own understanding of reality. And it is succeeding in doing this. Linton recalls our attention to the fact that what is striking in Breivik Berg is not his insanity, but how much he reflects stereotypes and plot-syndromes related to Islam that unfortunately are represented in more or less all the European parliaments (as well as in the EU one).     

 

Not even the book by Elmbrant, one of the most prominent Swedish journalists, is intended to bring comfort to the reader. Here as well the impact of the economic downturn is looked into in a European perspective, yet with a particular attention to countries such as Greece (see chapter 1, Ett land faller sönder) and Ireland (chapter 3, Irland på liv och död). In chapter 2 (Hur hamnade vi här?) the author follows the making of the Euro and then compares the faith of two countries, Ireland and Iceland; both hit by the crisis, but the latter (outside the common currency) recovering better. Italy is not at all forgotten in this account: the doubts about its financial soundness have been recurrent amongst EU – and German in particular – leaders, for many years. However, Elmbrant warns (chapter 4, Skenbilden av krisen) against those, in Brussels as well as Berlin and Paris, who blame upon some countries ? the Southern European ones primarily ? the European financial difficulties, as the problem were simply that if one spends too much, then one has to pay back sooner or later. Elmbrant is well aware that Greece, with all the stereotypes surrounding it, has worked as a perfect scapegoat, but insists on the European dimension of the economic crisis. The trouble indeed is not the Greeks’ unreliability, but the EU powerlessness in the face of much bigger transnational financial powers. In this connection, it needs to be said that left-wing parties have definitely not been united and consistent in their (often late) condemnation of the abuse of power from private banks and finance at large.

It cannot miss, in this critical report about the EU state of health, a chapter on Angela Merkel, significantly entitled She who decides (5, Hon som bestämmer) and on Germany’s hegemonic role. The outcome of financial powers’ and Germany’s supremacy are described in chapter 6 (Europas stålbad), again focusing mostly on Southern Europe, but raising a more general question: the changing role of the Nation-State. Here Elmbrant mentions an article on The New Left Review by the German social scientist Wolfgang Streeck as crucial: the dismantlement of Europe’s social policies has restricted the ability of the State as far as mediating between citizens’ rights and Capital’s diktats is concerned, and by this move increased further the latter’s authoritativeness as well. There have been massive demonstrations against budget-restriction policies, at least in Greece, Spain and Portugal (chapter 7, De unga på marsch), but Elmbrant does not forget that up to now it is the Radical Right the political actor who seems to have taken more advantage from the crisis, and not the Left. Are the European Central Bank and Merkel right when presenting austerity as the only way out of the crisis or can young people protesting in Athens, Madrid and Lisbon point out to an alternative? The last two chapters are built around this question. 

After summarizing the different proposals currently discussed in the EU (in the end all related to the dilemma: more or less unity among member States? See chapter 8, Stopp i Brysseltrafiken), Elmbrant closes his report by handling the question of the future of the common currency (chapter 9, Har euron en framtid?). After looking at expert analysis and people’s mood his answer (well reflecting Swedish attitude to the EU) is: the Euro is doomed to collapse ? after all it has been a mistake from the beginning ? with consequences that in some cases will prove to be devastating.  And thinking at what is going on in many European countries we can easily believe that this apocalyptic scenario is not simply a kind of snobbery from the rich Nordic countries.   

Katy Fox, Peasants into European Farmers? EU Integration in the Carpathian Mountains of Romania (Zurich: LIT Verlag, 2011)

 

This phrase is used as a motto also by the author, Kathy Fox, in her investigation (p. 39) and I consider it most appropriate for numerous reasons. It applies also to the tremendously slow pace of change, seeming to remain ‘frozen in the project’, within the Romanian countryside. 

 

This volume takes the term ‘peasant’ seriously as a ‘source of significant economic difference’ (p. 41) and investigates how far the Romanian peasant, caught in transition, is from this status. This book is the result of a year-and-a-half ethnographical research into the European agricultural integration in the Southern Carpathian Mountains of Romania. The study succeeds to discuss the European agricultural policies, while identifying interesting correlations between practices and personhood.  EU’s Common Agricultural Policy (CAP) is analysed in terms of policies, elites, but mainly livelihood possibilities of the peasants. The realities of Romanian peasantry’s life (related to the subsistence farms and peasant households) are confronted with the “intelligible, efficient, standardized and commensurable” profile of the EU model.

 

The effort to surprise the local colour and to reach the essence is substantial: quickly going through the “Glossary” one can easily understand the varieties and the depth of the conversations with the local peasants. The list of acronyms, measurements and the schematics of the Agricultural Institutions in Romania are indicators of the analysis with the consciousness of the policy and local particularities, within households and inter-households, following cooperation, exchange and kinship.

 

Relating ‘modernity’, ‘progress’ and ‘civilisation’ with ‘transition’, the complexity of the status of peasant and the threat of marginalisation are unveiled. EU integration is seen also as Enlightenment epistemology and as a neo-liberal process of social and economic alignment in the implementation of common legislation. The analytic direction is to assess what persons are produced by the neoliberal project and how resilient are the manoeuvres of resistance (or compliance) in the long run. “Through the [modernization] project, an epistemology of colonisation is deployed: the expert subject creates an object of transformation, the peasant, which is diagnosed to be in need to change.” (p. 97) But within the particular Romanian context, this change intended by the elites is undermined by the weakness of the information vector – the “object of transformation” is not object of information too. “Generally, the institutions in formation in charge of CAP implementation were not well versed on how to get the ‘information’ to their ‘target audience’. The Ministry of Agriculture, it was often said, was one of the most ‘closed’ ministries in Romania, where little ‘reform’ had happened during the 1990s, and where procedures were very slow to be adapted to the new European framework.” (p. 97-98) Even the specialists have sometime a hard time dealing with the confusion and secrecy surrounding the details of the policies and regulations. Indeed, Romanian agricultural bureaucracy in charge with this modernisation lives off secrecy and manages ignorance very well to its own advantage (cf. Weber).

 

The study addressed also the orientation and effects of CAP in Romania. Kathy Fox notices four aspects of disjuncture “between integration and participation, information and institutions in formation, training and work opportunities on the countryside and welfare and the good life.” (p.111) Progress is related to real, material conditions that sustain or not the developments of this progress. When material infrastructure is absent or deficient, the progress policies are not founded. Originally CAP’s policies were designed for countries without the experience of state socialism. In post-communist states they might function as neoliberal rather than welfare measures, as they were originally intended. People experience closure and ”make do with what they have feeling both the constraints and the potential in their lives as they unfolded along a ‘margin of manoeuvrability’ and possibility”. (p.135) Human affairs emphasize the tension between means and ends and evolve unpredictably. The author identifies the male-centred organisation of the economic activity, especially the bounded character and closure status of women in the household. Their work is devalued and their life projects especially challenged. 

 

From the perspective of ‘restructuring’, within Romanian agriculture and animal husbandry the import and imposition of standards was not accompanied by the necessary accumulation of capital, with the exception of the large-venture entrepreneurs. The Western profit logic was thus impaired in Romania and led to a situation where animal welfare seem to value more than human welfare. Kathy Fox discusses the small improvement brought about by the EU’s Direct Payments (DP) policy (implemented for the first time in 2007). Thus, the implementation of DP gave in fact another boost to the bureaucratic systems, installing a reality of misunderstood and incomplete implementation. As a consequence, the idea of ‘partial’ implementation became the norm. Another aspect under investigation is here the paradoxical trait of the reform that disembeds local food production and shows that EU legislation and processes of branding further marginalized Romanian peasantry and did not bring much benefice through EU’s ‘certified traditional produce’ policy. (p.231)

 

Philosophy, sociology and ethnography come together to present the peasant as a homo economicus, who sought self-interest in a quest for improved positioning, while he understood when to cooperate and when to manoeuvre, despite the shaken trust in others both by state socialism and aggressive capitalism. The very idea of progress seems conquered by a dispiriting perpetual transition. The valuable perspective of the author is to relate to EU legislation as visions of social order and frameworks for ‘thinking forward’, and not just technical regulations. People are to learn not merely legislation and procedures, but the wider lesson that dichotomies, incomplete stages and partial success are part of the modernist vision that modern economic and political projects share. The key element is not the elite and expert benevolent action addressed to the immature and knowledge-deprived peasantry, but rather the transparent dissemination of information and the construction of material conditions and the infrastructure crucial for the successful implementation of the EU policies and reforms.