Was the bailout of Greece legal?

Edited by Keith Ewing, Professor of Public Law at King’s College London, for USI

As the European political crisis becomes ever more intense and the economic crisis ever more acute, there is a third crisis yet to unfold.  This is the crisis of legality now engulfing the EU, an entity that seems to be free to do what it likes and to ignore the legal foundations on which it is supposed to be built.

The EU, its institutions and its representatives are required to act with legal authority and within the scope of legal powers.   To this end, the post–Lisbon treaty is full of clearly expressed principles and obligations, the EU apparently founded on the values of ‘human dignity, freedom, democracy, equality, the rule of law and respect for human rights’.

The treaty otherwise provides not only that the EU will work for sustainable development based on economic growth, but that it will do so to promote ‘a highly competitive social market economy aiming at full employment’.   This will all be done while also advancing solidarity and social justice, as well as ‘equality between men and women’,

So what is the problem?   The answer is that the terms of the bailout negotiated by the Troika (in which EU institutions played a prominent part) do not appear to comply with these provisions, leading to serious questions about the legality of the terms of settlement, the obligations imposed upon Greece, and the response of the last Greek government.

Evidence is to be found in the Report of a High Level Mission that visited Greece in September 2011, on behalf of the International Labour Organsiation (ILO), a UN agency responsible for setting and monitoring labour standards throughout the world.   Usually the ILO is preoccupied with developing countries; now to the great shame of the EU it is concerned with austerity.

The ILO has reported on the ‘exponential’ rise in the use of part time and ‘rotation’ contracts, as well as the emergence of large numbers of ‘discouraged’ workers, who it seems have just given up.   These new contractual arrangements have seen wages fall by up to 38%, accompanied by an increase in tax and social security contributions and reduced pensions.

This is being driven through while also weakening workers’ rights to trade union representation, casting aside guarantees in the Greek constitution.   According to the ILO, the industrial relations system built up over many years to reflect ‘Greek realities’ is now ‘vulnerable to collapse’, these developments having a ‘destabilising impact’ on the human right to freedom of association.

The concern is not only that wages established by collective agreements have been slashed.   Also, employers have now won the right not to pay collectively agreed wage rates, if they can secure the ‘agreement’ of workers to accept less.  This is the ultimate form of neo-liberal flexibility, with unprotected workers being ‘liberated’ to sign away minimum terms and conditions of employment.

Yet far from ensuring that the pain is endured equally between men and women, crucially the burden is falling disproportionately on the latter.   This is true especially in terms of the impact of growing levels of unemployment, and the move to part – time and rotation contracts, with women suffering additional problems of discrimination in trying to enforce maternity rights.

But it is not only the disproportionate impact of the law on women that has been revealed by the ILO.   There is also concern about law enforcement, the ILO highlighting the inability of the labour inspectorate to address equality issues, as well as the delays in the justice system that discourage women from using the courts.   So much for the right to equal treatment, once a cornerstone of EU social policy.

The gulf between the legal obligations of the EU and its treatment of the Greek people will no doubt eventually be fully confronted, with a day of reckoning in the courts.    If what is happening in Greece (and perhaps elsewhere) is not utterly illegal, we need to know why, and why the clear words of the EU treaty and the accompanying Charter of Fundamental Rights do not mean what they say.

Under the Charter, EU citizens have a right to freedom of association, including the right to form and join trade unions for the protection of their interests, a right which for reasons that need not be explored here includes the right to bargain collectively.   What we see in Greece is the destruction not the promotion of collective bargaining, as provided for in international labour conventions.

The Charter also provides that ‘equality between men and women must be ensured in all areas, including employment, work and pay’.  It also feigns to guarantee the right of ‘every worker’ to ‘working conditions that respect his or her health, safety and dignity’.  What we see in Greece is the violation of the principle of equality and the degradation of worker dignity.

Next month’s election in Greece and the imminent referendum in Irelandwill give working people an opportunity to pass judgment on the bailout measures that have been imposed on their countries.   In doing so, the working people of Greece and Ireland may wish to reflect on the arrogance of institutions that appear blissfully indifferent to the legal obligations by which they are bound.   Such is the inconvenience of the ballot box.