“Economy should serve the people, not vice versa” – UN expert says after assessing EU adjustment policies

BRUSSELS / GENEVA (3 June 2016)

6 June by Juan Pablo Bohoslavsky

CC - Flickr - Stefano Costa

Recent austerity policies are hitting the most vulnerable and are undermining economic, social and labour rights within the European Union, today said United Nations Independent Expert Juan Pablo Bohoslavsky at the end of his fact-finding visit* to EU institutions in Brussels.

“I am concerned about a policy shift undermining the previously balanced approach of ensuring economic stability, equality and social cohesion, in favour of a disproportionate focus on budgetary stability,” warned the international expert charged by the UN Human Rights Council to analyse and report on the effects of debt crises on human rights.

“Poverty has been on the rise in one of the most affluent regions of the world”, Mr. Bohoslavsky stressed. About 121 million people in the EU are at risk of poverty or social exclusion. Their number has in particular increased in countries that underwent a financial crisis and structural adjustment Structural Adjustment Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).

IMF : http://www.worldbank.org/
, such as Greece and Spain.

“It is unlikely that the European Union will reach in 2020 its official target to reduce the number of people at-risk-of poverty and social exclusion by 20 million people,” he said while noting that there are around 21.4 million unemployed persons in the EU, 4.7 million more than in 2008, before the financial crisis spread.

The Independent Expert highlighted that “while Member States of the European Union are primarily responsible for adherence to their international human rights obligations, international institutions, including the EU, its bodies and financial institutions are not beyond the reach of international human rights law.”

“When making policy recommendations or setting binding conditionalities for providing loans, EU institutions and bodies have - at an absolute minimum - to respect international human rights treaties to which all their Member States have become a party,” Mr. Bohoslavsky underscored.

The human rights expert noted that the EU has developed tools to assess the impact of austerity measures and international trade agreements on social and human rights. “However,” he said, “when it comes to internal macroeconomic policies human rights standards are not explicitly used as benchmarks against which structural program reforms are assessed.”

The Independent Expert welcomed the announcement by the President of the European Commission that all future adjustment programmes supported by the Commission should be assessed on their social impact.

“This is a step in the right direction,” he stated. “Yet, economic reform programmes and the annual country specific recommendations issued by the European Commission should not only be based on economic and social indicators, but also be assessed on their human rights impact. Such assessments should be participatory and include consultation with affected rights-holders, civil society in order to be more than tick-box exercises to be meaningful.”
For Mr. Bohoslavsky, the evaluation of past economic reform programmes should focus on whether they have ensured a fair and equal distribution of the burden of adjustment within society, and not only on whether they have managed to reduce budget deficits, restore debt sustainability, or economic growth.

“We need to know to what extent such programmes protected economic and social rights and where there are gaps,” he said. “Such gaps need to be urgently addressed and also inform recommendations, programme design, financial or technical support provided by the European Union.”

“It is time to recover social rights within the EU and I hope that most recent initiatives from the European Commission, such as the European Pillar on social rights, will contribute to this aim,” the expert concluded. “Such a pillar on social rights needs however to be based on a good foundation and respond to relevant human rights obligations that EU member States have assumed under international and regional human rights law.”

The Independent Expert will present his final findings and key recommendations in a comprehensive report to the UN Human Rights Council in March 2017.

(*) Check the Independent Expert full end-of-mission statement: http://www.ohchr.org/EN/NewsEvents/...

Mr. Juan Pablo Bohoslavsky (Argentina) was appointed as Independent Expert on the effects of foreign debt and human rights by the United Nations Human Rights Council on 8 May 2014. Before, he worked as a Sovereign Debt Sovereign debt Government debts or debts guaranteed by the government. Expert for the United Nations Conference on Trade and Development UNCTAD
United Nations Conference on Trade and Development
This was established in 1964, after pressure from the developing countries, to offset the GATT effects.

http://unctad.org
(UNCTAD) where he coordinated an Expert Group on Responsible Sovereign Lending and Borrowing. His mandate covers all countries and has most recently been renewed by Human Rights Council resolution 25/16. He is independent from any government or organization and serves in his individual capacity. Learn more, log on to:
http://www.ohchr.org/EN/Issues/Deve...

Read the Independent Expert’s report on Greece (A/HRC/31/60/Add.2): www.undocs.org/A/HRC/31/60/Add.2

The Special Rapporteurs are part of what is known as the Special Procedures of the Human Rights Council. Special Procedures, the largest body of independent experts in the UN Human Rights system, is the general name of the Council’s independent fact-finding and monitoring mechanisms. Special Procedures mandate-holders are independent human rights experts appointed by the Human Rights Council to address either specific country situations or thematic issues in all parts of the world. They are not UN staff and are independent from any government or organization. They serve in their individual capacity and do not receive a salary for their work.

For more information and media requests please contact Mr. Gunnar Theissen (+41 22 917 9321 / gtheissen@ohchr.org) or write to ieforeigndebt@ohchr.org

For media inquiries related to other UN independent experts:
Xabier Celaya, UN Human Rights – Media Unit (+ 41 22 917 9383 / xcelaya@ohchr.org)

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Source: OHCHR

Author

Juan Pablo Bohoslavsky

Independent Expert on the effects of foreign debt and other related financial obligations of States on the full enjoyment of all human rights, particularly economic, social and cultural rights


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