Greek austerity measures could violate human rights, UN expert says / UN News Centre / ICH

Cephas Lumina, UN expert 

30 June 2011 –

The United Nations independent expert on foreign debt and human rights warned today that the austerity measures and structural reforms proposed to solve Greece’s debt crisis may result in violations of the basic human rights of the country’s people, the Office of the High Commissioner for Human Rights (OHCHR) reported. “The implementation of the second package of austerity measures and structural reforms, which includes a wholesale privatization of state-owned enterprises and assets, is likely to have a serious impact on basic social services and therefore the enjoyment of human rights by the Greek people, particularly the most vulnerable sectors of the population such as the poor, elderly, unemployed and persons with disabilities,” said Cephas Lumina, who reports to the UN Human Rights Council in Geneva.
“The rights to food, water, adequate housing and work under fair and equitable conditions should not be compromised by the implementation of austerity measures,” he said, urging the Government to “strike a careful balance between austerity and the realization of human rights, taking into account the primacy of States’ human rights obligations.”
Mr. Lumina also called upon the authorities to maintain some fiscal leeway to meet its people’s basic human rights, particularly economic, social and cultural rights.
“Tax rises, public expenditure cuts and privatization measures have to be implemented in such a way that they do not result in unbearable suffering of the people,” he said.
“Debts can only be paid out of income,” Mr. Lumina said. “A shrinking economy cannot generate any revenue and contributes to a reduced capacity to repay the debt. More time should have been allowed for the restructuring measures already in place to work.”
The independent expert also called on the International Monetary Fund (IMF), the European Union (EU) and the European Central Bank (ECB) to remain aware of the human rights impact of the policies they design in attempting to resolve the sovereign debt crises in Greece and other countries.
“There will be no lasting solution to the sovereign debt problem if the human rights of the people are not taken into account,” said Mr. Lumina, who serves in an unpaid capacity.

News Tracker: past stories on this issue

UN expert lauds UK limits on vulture funds that prey on poor nations’ debt

Iceland’s ex-PM Geir Haarde tell court he is innocent as historic financial crisis trial opens / Associated Press

By Associated Press, Published: March 4 | Updated: Monday, March 5, 6:28 AM

REYKJAVIK, Iceland — Iceland’s former prime minister has rejected charges he failed to adequately protect his country’s economy from financial shocks in the first criminal trial of a world leader over the 2008 financial crisis.
“I reject all accusations, and believe there is no basis for them,” Geir Haarde said as he took the stand on Monday. He said it was the first chance he had to answer questions in the case.

( Kristinn Ingvarsson / Associated Press ) - Former Prime Minister of Iceland Geir Haarde, centre. sits in a court in Reykjavik Monday March 5, 2012 . Iceland’s former prime minister went on trial Monay as the first world leader to face criminal charges over the 2008 financial crisis that affected much of the world economy. Geir Haarde became a symbol of the bubble economy for Icelanders who lost their jobs and homes after the country’s main commercial bank collapsed in 2008, sending its currency into a nosedive and inflation soaring.

Haarde became a symbol of the bubble economy for Icelanders who lost their jobs and homes after the country’s main commercial banks collapsed in 2008, sending its currency into a nosedive and inflation soaring.
Prosecutors opened the case at the Landsdomur, a special court being convened for the first time in Iceland’s history.
Part of their case hinges on a charge that Haarde failed to implement recommendations a government committee had drawn up in 2006 to strengthen Iceland’s economy.
Haarde told the court that the committee’s work could not have prevented Iceland’s economic crash.
“Nobody predicted that there would be a financial collapse in Iceland” in 2008, he said, adding that the government did not fully understand how much debt the country’s banks had on their books.
Haarde is accused of negligence for failing to prevent the financial implosion from which the small island country is still struggling to recover.
In the crisis’ immediate aftermath — as unemployment and inflation skyrocketed — many sought to affix blame for the havoc across the 330,000-strong nation. A wave of public protests forced Haarde out of government in 2009.
Haarde has pleaded not guilty and sought to have all charges dismissed, calling the proceedings “preposterous.”
He has insisted Icelanders’ interests were his “guiding light,” and blamed the banks for the crisis, saying government officials and regulatory authorities tried their best to prevent the crisis and that his “conscience is clear.”
The trial is expected to last until mid-March, with the court taking another four to six weeks to deliver its verdict.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 
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Greek default looms as voluntary debt deal looks set to fail / Louise Armitstead / The Telegraph / Information Clearing House

European leaders are braced for the eurozone’s first ever sovereign default this week as Greece’s efforts to secure a €206bn (£172bn) “voluntary” bond swap looks increasingly unlikely.

Credit rating agencies have warned they will declare Athens to be in default if they force bond swap on investors. Photo: Getty

By Louise Armitstead

9:30PM GMT 03 Mar 2012

857 Comments

Authorities in Athens are ready to enforce the controversial collective action clauses, or CACs, to impose the restructuring deal on all bondholders as the number of voluntary agreements look set to fall short of the required amount.

Credit rating agencies have warned they will declare Athens to be in default if the CACs are triggered which would be a dramatic culmination to a three-year rollercoaster ride for Athens, the eurozone and global markets.

While the markets have been ready for a Greek default for months, the move could leave Greece and its banks barred from funding from the European Central Bank (ECB). On Monday, Standard & Poor’s declared Greece to be in a state of “selective default” which led to the ECB announcing it would no longer accept Greek government bonds as security for new loans.

The rating agency said its decision had been prompted by the threat of the CACs and the actual use of them is likely to tip Greece into actual default. The agency said it regarded the process as a “distressed debt restructuring”.

Raoul Ruparel of Open Europe, the London-based think-tank, said: “Greece is likely to struggle to reach the targets for a voluntary agreement so the credit rating agencies are almost certainly going to see this as a default.

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"What happens next is unknown territory.
"Greek banks will probably be barred from normal ECB funding and have to turn to the Emergency Liquidity Assistance [provided by the ECB] instead but for how long, we don’t know.”
Greece needs around 95pc of its private creditors to accept the deal by the deadline on Thursday in order to secure its €130bn international bail-out package and avert imminent bankruptcy.
Greek politicians back the use of CACs – which allow the deal to be imposed on all bondholders if 66pc agree to it – being inserted retrospectively if the voluntary agreement falls short.
The uncertainty over the deal on Greek debt put further pressure on the euro last week. The single currency fell sharply against the dollar and other major currencies.
Uncertainty over Spanish willingness to stick to its austerity programme also put pressure on the currency.
Last week, the International Swaps and Derivatives Association (ISDA) declared that there had not yet been a credit event in Greece so there was no need for the credit default insurance instruments to be triggered.
If the CACs are triggered this week, the committee will almost certainly reconsider its decision.


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The EU austerity disaster by Siobhan Dowling / GlobalPost / Salon

Draconian spending measures are plunging the euro zone deeper into a double-dip recession

 BERLIN, Germany — Europe is on the hunt for growth, but has little idea where to find it.

Many EU countries are being forced to follow a strict austerity path to slash their debts, but these measures seem to be sapping their ability to grow their economies and create jobs.
Some analysts warn that in the absence of measures to boost growth, more bailouts and debt write-downs could be in the cards.
The latest figures are certainly worrying.
The euro-zone economy contracted by 0.3 percent in the fourth quarter of 2011, the EU’s statistics office Eurostat confirmed on Tuesday, and unemployment reached an average of 10.7 percent in January, the highest since the euro was introduced in 1999.
That figure masks the huge discrepancies within the bloc. For example, while Spain’s unemployment is now at 22.9 percent, Austria’s is only 4 percent.
Most attention recently has focused on the drama in Greece, which has required a second bailout in two years to keep from defaulting on its debts.
The embattled country has been prescribed severe austerity in recent years to tackle its alarming public debt mountain, yet the medicine seems to be killing the patient. The Greek economy shrank by 6.8 percent in 2011. The bulk of the new 130 billion euro ($172 billion) bailout will go to lenders rather than being used for any measures to boost growth.
The Greeks are not alone. Ireland and Portugal, the other two recipients of bailouts from the troika of the European Central Bank, the European Union and the International Monetary Fund, have also had to sign up to reforms and punishing public-spending cuts as a condition for the funding.
Portugal in particular is struggling to find growth prospects. Last week, Finance Minister Vitor Gaspar announced that the economy is now expected to contract by 3.3 percent this year, instead of the previous forecast of 3 percent. Unemployment has soared to over 14 percent and the government is even encouraging people to emigrate. Last week President Anibal Cavaco Silva called on the government not to impose yet more austerity on the country’s “new poor.”
And even the austerity drive may not be achieving the government’s aims. Borrowing costs are still prohibitive at 13.07 percent, and Standard & Poor’s recently reduced the country’s rating to junk. “Portugal is doing the best it can to spread the message that we are not Greece, that we are implementing reforms,” said Luis Faria, director of the Lisbon-based Contraditorio think-tank. “But the market is still waiting for credible signals.”
Although Lisbon has managed to cut the deficit from 9.1 percent in 2010 to 5.6 percent last year, that is largely on the back of one-off measures such as transferring banks’ pension funds to the state, says Faria.
He argues that Lisbon will not be able to return to the bond markets any time soon. “It seems obvious now that either another bailout will be negotiated or orderly default will be the solution.”
Meanwhile, Ireland may be the poster boy for European austerity, even managing to see a slight growth of 0.9 percent last year after three years of contraction.
Yet it too is suffering from the negative consequences of austerity. Businesses are struggling and the unemployment figure has soared to over 14 percent, and would probably be higher if it were not for emigration. And while exports have driven the recovery, the rest of the economy is extremely sluggish.
“The prospects are quite poor for Ireland,” said Tom O’Donnell of the TASC think-tank, based in Dublin. “I don’t think it’s accurate to say that we are a successful example of austerity. Austerity has been very damaging, in terms of growth and demand.”
Particularly galling for the Irish is that the punishing cuts and tax hikes are required in large part to pay off the colossal debts of reckless banks who bet on the country’s massive property bubble. The Irish government is currently committed to paying 3 billion euros a year for the next 15 years to the unsecured bondholders of the worst offender, Anglo Irish Bank — a massive burden on such a small country.
With the economy only expected to grow by 0.5 percent this year, the prospects of returning to the bond markets in 2013 are fragile, something acknowledged by the IMF only last week.
O’Donnell says that many economists believe that Ireland will probably require a second bailout, which would be under the auspices of the European Safety Mechanism, the new rescue fund. That may well be a consideration for Irish voters who face a referendum on the fiscal pact, as its ratification is a precondition for the rescue fund’s support.

Education Cuts Spur Huge Student Protests Across Spain by Agence France-Presse / Common Dreams staff

 February 29, 2012
Tens of thousands of students marched out of their schools across Spain today, protesting broad education cuts that have caused teacher layoffs, overcrowded campuses and unheated classrooms. Tensions were highest in Barcelona, where police and protesters clashed as more than 30,000 people took to the streets.
Students shout slogans during a protest against cuts in education in central Madrid. (Photo: Reuters) Agence France-Presse reports:

Protestors marched through the streets in various towns after some camped the night in universities in a movement dubbed Primaveraestudiantil ("Student Spring") and Tomalafacultad ("Seize the faculty") on Twitter.
The national students' union said marches were called in about 40 cities and towns across the country to protest the austerity measures they say are disrupting classes and cutting teaching jobs.
"We did not create this crisis but we are paying for it in every sense," said the union's leader Tohil Delgado ahead of Wednesday's marches, saying classes and thousands of teaching jobs have been cut.
"They are making cuts in public education, they are giving us no option to work, and on top of this, when we protest democratically, they beat us with complete impunity."
He estimated turnout at the Valencia demonstration alone was in the tens of thousands.
In Madrid students whistled and chanted slogans such as "Fewer cuts, more education!"
They rallied noisily outside the national education ministry and stopped on their march to whistle angrily outside offices of Santander, a major bank.
They were the latest in a string of demonstrations in various sectors in anger at cuts and reforms that the conservative government says will strengthen the economy and eventually curb unemployment, which is near 23 percent.
"All the cutbacks and the labour reforms make it hard for youths to enter the labour market," Diego Parejo, 21, a third-year politics student, at the Madrid demonstration, told AFP.
"When I finish university, I see a very dark future."

And The Guardian reported on events in Barcelona:Students and riot police clash during education protest in Barcelona. (Photograph: David Ramos/Getty Images)

Fires were lit in the streets, cars burned and bank windows were smashed with missiles as the protests turned violent. At least one bank was broken into and police fired rubber bullets as roads in the city were blocked.
Baton-wielding riot police made several charges, pushing hundreds of demonstrators back into the main buildings of the University of Barcelona, not far from the central Plaça de Catalunya.
A small group of peaceful demonstrators marched on the Mobile World Congress – a major international telecoms trade fair – being held at the city's exhibition centre, blocking a nearby main road.
Masked protesters also attacked a television cameraman as authorities suggested the student protests had been infiltrated by troublemakers. "This gives an image of students and the university world that is simply not real," said Antoni Castellà, the director of universities for the Catalan regional government.
Early reports were of a handful of arrests and nine injuries.
"We did not expect this degree of repression," said Pau Brosons, a student, after police hit protesters with truncheons. "Nobody broke anything until they charged."
Students were due to assemble again on Wednesday night to decide whether to continue their protests.

A report in the Los Angeles Times warned that today's protest might only be an "omen of what's to come," and continued, "Spaniards are only beginning to feel the effects of a $20-billion package of spending cuts and tax hikes passed this year by the newly installed conservative government. Further spending cuts may follow because Madrid is still flouting rules limiting budget deficits for members of the 17-nation Eurozone."

Greece's Debt Crisis Bodes Ill for Us All by Ted Kaufman / Huffington Post

02/28/2012
I think of myself as an optimist. Over the years, I have seen a lot of crises resolved, as often as not by what can only be described as muddling through.

It is hard to see how the world will muddle through the Greek debt crisis. "New Bailout is a Reprieve for Greece, but Doubts Persist," was the February 21 headline in the New York Times. Count me among the doubters.

As complicated as the debt crisis is, the resolution of the problem is in the hands of two governments -- Germany and Greece -- and, more importantly, the electorates in each of those democracies.

Before I explain that, let's look at how grim the situation is. The Greek national debt stands at 160 percent of GDP. In order to get relief from the rest of the eurozone (read: Germany), the government had to agree to get that down to 120.5 percent by 2020. In order to do that, Greece has introduced severe austerity measures that will slash 150,000 government jobs, cut private sector wages by 22 percent, reduce or eliminate pensions, sell off public enterprises, and raise taxes. All this in a country where unemployment among those under 25 is just under 50 percent.

Here's the catch-22: if the government were able to do all of this (a big if), the immediate effects on the Greek economy would be crushing. The austerity measures are bound to shrink the economy, thus making the debt to GDP ratio even worse.

Meanwhile bondholders have agreed to a 50 percent cut in value, and the second round of bailouts just announced allows Greece temporarily to avoid a default. But what happens now?

Within Greece, the people have to agree with what their leaders have promised to its eurozone benefactors. Will they accept the extreme hardships that will be imposed on them? Greece is a democracy. Ultimately, the government will either respond to what the people want or it will fall. The riots and the burning of buildings in Athens aren't hopeful signs for the current government.

Germany, which essentially controls the eurozone, is a democracy as well. Just how many billions of their money will the German people sacrifice to prop up a country they consider irresponsible? Contrary to many press reports, Germany has demonstrated more than most countries a willingness to take on the burdens of others. West Germany shouldered a herculean economic load when the wall came down and it merged with East Germany. But a strong majority of Germans do not believe they should finance a country like Greece, particularly when the social benefits offered there have been greater than their own.
Put yourself in a German's place. You pick up your newspaper last October and read that Diomidis Spinellis, Secretary General of the special task force to stop tax evasion in the Greek Finance Ministry, has thrown up his hands in disgust and quit because of what he describes as a "deficit of management" will to stop the corruption that permeates the tax system. Obviously the systematic tax evasion that has long been part of Greek culture is proving difficult to change. Spinellis charged that tax collectors continue to skim off the top of taxes they do collect, and many publicly identified tax avoiders have still not paid their taxes. Am I, as a German, going to support my government if it wants to send more of my money to this place?

Add this: if you are a law-abiding Greek taxpayer, given what austerity is doing to your job or your business, paying greatly increased taxes may prove to be impossible.

There are lots of catch-22s in this terrible crisis, and they should have been taken into account when the eurozone was first established. The countries that joined gave up control of their individual monetary policies when they lost the ability to control their money supply. It was clear from the beginning that Germany would end up in effective control of eurozone monetary policy because of its size, economic power and culture. It should also have been clear that part of that culture was a deeply ingrained fear of inflation, a legacy of the collapse of the Weimar Republic.

We are watching a tragedy unfold, one that could ultimately have wide-ranging negative effects on our own economy. I can only wish I were more optimistic about our chances of muddling through.
Ted Kaufman is a former U.S. Senator from Delaware. Please visit www.tedkaufman.com for more information.
This piece first appeared in the Wilmington News Journal.

 

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Read more from Huffington Post bloggers:

Elena Panaritis: What's Next?

Greece must embrace a holistic approach to reforms that would be guided by an overall reduction of transaction costs, concentrating in simplifying processes. Simplification would be the best start.

David Paul: Politicians Seeking Upper Hand Over Hedge Funds in Greek Bailout

There are many participants involved, and each has their own set of metrics for a successful outcome of the Greece workout.

Diane Francis: Greece Is Ungovernable

The evidence of anti-governance is there: Greek people have staged debilitating strikes, violent rampages and tax revolts. Greece, for its part, will be well-advised to simply leave and let the IMF help it pick up the pieces.

Education Cuts Spur Huge Student Protests Across Spain by Common Dreams

 February 29, 2012
Tens of thousands of students marched out of their schools across Spain today, protesting broad education cuts that have caused teacher layoffs, overcrowded campuses and unheated classrooms. Tensions were highest in Barcelona, where police and protesters clashed as more than 30,000 people took to the streets.
Students shout slogans during a protest against cuts in education in central Madrid. (Photo: Reuters) Agence France-Presse reports:

Protestors marched through the streets in various towns after some camped the night in universities in a movement dubbed Primaveraestudiantil ("Student Spring") and Tomalafacultad ("Seize the faculty") on Twitter.
The national students' union said marches were called in about 40 cities and towns across the country to protest the austerity measures they say are disrupting classes and cutting teaching jobs.
"We did not create this crisis but we are paying for it in every sense," said the union's leader Tohil Delgado ahead of Wednesday's marches, saying classes and thousands of teaching jobs have been cut.
"They are making cuts in public education, they are giving us no option to work, and on top of this, when we protest democratically, they beat us with complete impunity."
He estimated turnout at the Valencia demonstration alone was in the tens of thousands.
In Madrid students whistled and chanted slogans such as "Fewer cuts, more education!"
They rallied noisily outside the national education ministry and stopped on their march to whistle angrily outside offices of Santander, a major bank.
They were the latest in a string of demonstrations in various sectors in anger at cuts and reforms that the conservative government says will strengthen the economy and eventually curb unemployment, which is near 23 percent.
"All the cutbacks and the labour reforms make it hard for youths to enter the labour market," Diego Parejo, 21, a third-year politics student, at the Madrid demonstration, told AFP.
"When I finish university, I see a very dark future."

And The Guardian reported on events in Barcelona:Students and riot police clash during education protest in Barcelona. (Photograph: David Ramos/Getty Images)

Fires were lit in the streets, cars burned and bank windows were smashed with missiles as the protests turned violent. At least one bank was broken into and police fired rubber bullets as roads in the city were blocked.
Baton-wielding riot police made several charges, pushing hundreds of demonstrators back into the main buildings of the University of Barcelona, not far from the central Plaça de Catalunya.
A small group of peaceful demonstrators marched on the Mobile World Congress – a major international telecoms trade fair – being held at the city's exhibition centre, blocking a nearby main road.
Masked protesters also attacked a television cameraman as authorities suggested the student protests had been infiltrated by troublemakers. "This gives an image of students and the university world that is simply not real," said Antoni Castellà, the director of universities for the Catalan regional government.
Early reports were of a handful of arrests and nine injuries.
"We did not expect this degree of repression," said Pau Brosons, a student, after police hit protesters with truncheons. "Nobody broke anything until they charged."
Students were due to assemble again on Wednesday night to decide whether to continue their protests.

A report in the Los Angeles Times warned that today's protest might only be an "omen of what's to come," and continued, "Spaniards are only beginning to feel the effects of a $20-billion package of spending cuts and tax hikes passed this year by the newly installed conservative government. Further spending cuts may follow because Madrid is still flouting rules limiting budget deficits for members of the 17-nation Eurozone."