29 January 2014

EUobserver: Bailout troika 'in breach' of EU human rights laws - German legal expert

Austerity programmes agreed with the troika of international lenders are in breach of the EU's Charter of Fundamental Rights, according to a professor of European law and politics. VP Karas subsequently said the troika was necessary but it needed democratic legitimation, control and transparency.

Fischer-Lescano, a professor of European law and politics at the university of Bremen, was tasked by the European Trade Union Confederation to look at the legality of so-called memorandums of understanding (MoU) signed between bailed-out countries and their lenders. He concluded that under the EU charter of fundamental rights, a legal text which became binding for Member States in 2009, several austerity measures enshrined in the MoUs can be fought in courts. "There are certain limits to what you can write in a memorandum of understanding. In a bank contract too, there are limits to what can be written, courts and laws are always limiting that. In international agreements it should be the same, the troika MoU is not beyond the law either", Lescano told this EUobserver.

He noted that a recent inquiry by the European Parliament into the work of the troika was right to question its legal basis, particularly the European Central Bank's lack of a mandate to demand structural reforms from national governments. "But this is just part of the problem. The EP inquiry is almost not looking at all at the human rights component", he added.

He also noted that the concept of “financial stability” was put above all other considerations. "But financial stability cannot be achieved without social stability", he said. "What is missing is the EU taking its own responsibility for these measures. They always say responsibility for the adoption and application of these measures lies with Member States. But without agreeing to these terms, there would have been no loans."

The German expert was wary about the prospect of a legal challenge in European courts being likely to repel the MoUs in their entirety, but he expressed hope that some adjustments to the troika programmes could be made.

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Karas: Troika was necessary but it needs democratic legitimation, control and transparency

"We will propose an instrument to organise solidarity in Europe, which will be based on Community law. The Troika has been an interim solution which was necessary and right. But for the future we need long term solutions", said VP Karas.

Karas stressed: "The European Parliament is taking action, because we represent the European citizens and our responsibility is to strive for greater transparency, for greater democratic legitimacy and to call for more democratic scrutiny. As Members of the European and National Parliaments we represent all taxpayers and we have a duty to control where the money is going and what are the end results That is precisely what we are doing."

Press release, 30.1.14

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