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.
The volume offers not only good quality contributions, but also a short biography of the authors, an explanation of the abbreviations, an introduction, and, at the end of the volume, a useful index.
The aim of this collection is to point out the role of governments in monitoring and managing resources addressed to equality. State parties have the power to establish the use of economic and other resources, public servants to distribute them, and civil society to give a feedback. Academics are very important in this respect: they can analyse the percentage and the employment of a government’s budget, and give their professional advice on its use. All the authors of this volume show, with both theoretical foundations and practical evidence, how neoliberal policies are insufficient to fight a severe financial crisis. Different paradigms, based on a Keynesian view, are proposed. Every contribution is well supported with references to international policies and concrete results, making the proposed alternative approaches desirable.
For what concerns human rights, the Article 2 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) states that governments have to use the maximum of their available resources to guarantee these rights (p. 13). However, the concept of ‘maximum available resources’ is subject to interpretation and sometimes is disrespected, as Nolan points out (p. 45). This happens especially in periods of economic crisis, when resources are more limited and governments make cuts to public expenditures.
The authors of this volume criticize, first of all, the necessity of these cuts, arguing that they are due to a neoclassical view of the economy. This view, shared by the International Monetary Fund and other financial institutions, places great emphasis on balanced budgets and low debt policy. According to neoclassical economists, a short period of austerity is necessary to restore a pre-crisis order. A Keynesian approach, on the contrary, suggests a stronger and focused injection of public money, in order to set economy in motion and support the weakest categories of the population (cfr. p. 19).
For what concerns the theoretical aspect, Paul O’Connell’s contribution is very relevant. It contains not only an account of Keynesian thought, but even a radical critique to neoliberal policies. O’Connell states the ideological nature of the push for austerity: governments, agreeing with financial institutions, try to entrench neoliberal capitalism (p. 61). Citizens should make their contribution to the deliberative process, which is not a matter for ‘technicians’. O’Connell also suggests a participatory budgeting policy, in order to protect and implement human rights (pp. 72-73).
Another key point of this collection is the concept of ‘progressive measures’. Even when some cuts on public expenditures are necessary and the tax system becomes heavier, there should be a fair distribution of the charges among the population. A retrogressive measure, on the contrary, has an unbalanced impact on it and affects mainly the disadvantaged. As Ignacio Saiz argues, tax collecting is very important for increasing available resources (pp. 80-81). Countries with a low tax income are the most subject to inequalities, because they have a limited public budget and the few duties collected usually weigh on the poorest, while big companies, entrepreneurs or landowners avail themselves of reliefs. Countries with a balanced and progressive tax income, on the contrary, have a larger public budget, which can be used to guarantee economic and social rights (i.e. a Welfare State). Saiz also suggests a tax on financial transaction, which would generate additional resources in a progressive way (p. 102).
For what concerns the impact of governments on human rights, the authors of this volume show the close relation between financial disputes and political ones. Through a brief account of European and American history in the 17th and 18th century, Rory O’Connell points out how equality issues go all the way through the pursuing of a representative system. In a post-revolutionary era, when democracy is taken for granted and the debates on human rights are put aside, politicians should be re-educated (pp. 120-121). In the wake of Foucault, Rooney and Harvey point out the power of discourse and the insufficiency of mainstream theories in modifying political debates (pp. 130-132). An integrationist approach, trying to accommodate equality within existing paradigms, does not lead to significant changes in human rights issues. Conflicts are necessary to modify the discourse, thus a sharper contribution of civil society on political debate is suggested (pp. 134-135).
A significant section of this collection is dedicated to the application of budget analysis to specific contexts. Enakshi Ganguly Thukral writes about the importance of dedicating a part of a government’s resources to children, especially in poorer countries. They are not a homogenous group (age, gender, socio-economic status, physical and psychical health distinguish them); then an analysis of budget allocation and expenditure should go together with a focused implementation of it (pp. 147-148). Even gender policies are important, as Sheila Quinn shows (p. 164). Her study is focused not only on the analysis of Northern Ireland, but also on the definition of an effective and efficient gender responsive budget.
Methodology plays here a great role. The last part of this collection, called ‘Analysis in action’, shows that budget analysis must be carried out within a good framework. Eoin Rooney and Mira Dutschke point out the problems connected with social housing policy in Northern Ireland. The latter has been progressively subjected to neoliberal measures, such as privatization , making the situation of the people worse (p. 211). Public authorities and private associations need the help of academics, whose expertise is necessary to set up a good methodology. As Harrison and Stephenson write, an EHRIA (equality and human rights impact assessment) must balance rigour with usability, in order to guarantee a real implementation of human and social rights (p. 239).
There is a story to be told about this turn of events; both a general story about crises in the capitalist system, including this particular crisis, and also about how the crises have unfolded in particular countries. When I talk about crisis in this review I am not referring to the Euro crisis but to the banking crisis.
It is worth pointing out at the beginning of this review that it is a significant fact that a number of countries have avoided this crisis even though they have been affected by it as, I guess, every country in Europe at least has been. The Scandinavian countries, Norway, Sweden, Denmark and Finland have been able to avoid this crisis and the same applies to Canada. Finland has adopted the Euro and is having problems because of it, but all the four Scandinavian countries had learnt their lesson from their banking crisis in the early 1990s and managed to avoid all the pitfalls in the time leading up to the banking collapse in the autumn 2008. The key issue seems to have been a close monitoring of their banking systems and a tough management of the system by the state. It seems to me that the role of the state is probably the most important issue in this crisis. In the decade leading up to 2008 it seems to have become an accepted orthodoxy that somehow the market system needed only a minimum of regulation and was self-perpetuating. If there is any fairly clear lesson to be learnt from this crisis it is that this orthodoxy is a myth. The state is the most important institution for a well-functioning market, not because the state should regulate every minute detail of the market, but because the state must put in place a good legal framework, close monitoring and the willingness of the institutions to use those powers supplied by the state to control the financial market.
The other option is to leave the financial system to its fate in the market, so that the banks and other financial institutions can collapse and become bankrupt like any other business. It is an interesting fact that no government in Europe or North-America was willing to do this. There are various reasons for this but the two most important ones seem to me to be:
(a) First, the risk of contagion, meaning that when one financial institution falls the confidence in the others falls sharply, so that a bank that is in no way insolvent can suddenly become so because people do not trust it any longer. This does not happen in other markets: If a building firm collapses other building firms are not in danger of collapsing and the same does seem to apply generally to the manufacturing industry. What is so special about banks? The reason why financial businesses are not in this position is because they rely so heavily on trust in their operations. A bank is not like a library where money is stacked on every shelf, because the money that you put into your account the bank lends to somebody else, who is willing to pay the interest the bank asks for. So at any time there is only a tiny portion in the bank of the money people have put into it. If there is a run on the bank, it cannot pay all the owners of current accounts their money, even if it is in perfect order. That is the basic reason why we need central banks, banks that lend to other banks, when for some reason or other their own money does not suffice.
(b) The second one seems to me to be the fact that banks have become so important for the everyday life of ordinary members of the public that no government can leave the bank system alone. The smooth running of the banking system has become a matter of security for the public and government is responsible for public security. If government is found wanting in public security this can easily lead to public unrest. This fact, that is, the centrality of the banking system in the life of the members of the modern public is usually overlooked when examining the financial crisis and its importance.
This book explores what would happen if Ireland defaulted, did not pay any of its debts, only paid some, or paid most of them but not all. It seems to be the case that it will in all probability be impossible for the Irish state to pay all of its debt, because the Irish state decided to underwrite all of the debts of its banking system when it was grinding to a halt. This has had the consequence that public debt in Ireland is so large that it prevents the growth of the economy. Also, since Ireland decided to take up the Euro, it does not have the option of devaluing its own currency. So all roads to renewed profitability are paved with serious difficulties. This does not mean that it is impossible, but it will take a long time. The default of a sovereign state is not the same as the bankruptcy of a large business. It is much more complicated and serious, especially for the citizens of that state. All this is examined in this book.
The book is in four parts. The first part is general, where the authors explore research done on crises and contagion and there is a description of the problems facing Ireland and the possibilities the state has in its public finances. The second part consists of four essays on various aspects of the Irish financial crisis. It will probably have to restructure its debt and this will have to be selectively done; the public debt is analysed and it is discussed if the Irish state will be able to finance its public debt on the market when it returns there or whether the interest rate that the market requires will be unsustainable. One essay explores how Ireland´s problems are connected to the problems of the Euro. The third part collects five reflections on financial crises in other countries: Russia, Iceland, Argentina and New York. The fourth part is a collection of essays from various Irish perspectives on the debt and possible default of the Irish state.
This is an important book that deserves to be widely read. Every essay adds something to the panorama and at the end the reader is in a better position to evaluate the possibilities. The viewpoints are clearly expressed and well argued and even though acronyms are to be expected in this field of research they are kept to a minimum and should not prevent understanding of the issues. The arguments expressed here have relevance for many states in Europe at present.