[Editor’s Note: I-CONnect is pleased to feature a one-week symposium on the 10-year anniversary of the Euro crisis. We are grateful to our conveners–Professors Pietro Faraguna, Cristina Fasone, and Diletta Tega–for assembling a diverse group of scholars to explore this important moment in European history.]
—Pietro Faraguna, University of Trieste; Cristina Fasone, University of Rome «LUISS Guido Carli»; and Diletta Tega, University of Bologna
This I-CONnect symposium stems from a special section forthcoming in Quaderni costituzionali and features four posts concerning the impact of the Euro-crisis, ten years after the start of the subprime mortgage crisis in the US, on the four Eurozone countries that probably have been affected the most.
In fact, the year 2018 marked the end of the financial assistance programmes activated between 2010 and 2015 in favour of Ireland, Portugal, Spain Cyprus and Greece (which benefited from three rescue packages). These programmes were primarily financed through funds established within the European Union framework at large, by means of international agreements and having the Eurozone Member State as shareholders, as occurred in the case of the European Financial Stability Facility (EFSF) and of the European Stability Mechanism (ESM). To a lesser extent, the rescue of those Eurozone countries depended on the contribution of the International Monetary Fund (IMF) that has lent 26 billion euro to Portugal, 22.5 billion euro to Ireland, 1 billion euro to Cyprus and over 60 billion euro to Greece on the whole. Financial assistance was also conceded through bilateral loans (also by non-Eurozone countries): 80 billion euro in the framework of the first rescue package to Greece and 4.8 billion euro to Portugal. In comparison with the IMF and the bilateral assistance, the loans provided through the “European funds” was more generous by far. The European Financial Stabilisation Mechanism (EFSM), the only fund purely financed by the Union budget and regulated by EU law, in particular by Council Regulation (EU) No 407/2010 of 11 May 2010, provided for financial assistance to Portugal and Ireland for 26 and 22.5 billion euro, respectively. The EFSF contributed to the rescue of Portugal with 26 billion euro, of Ireland with 17.7 billion and of Greece, in the context of the second package of financial assistance, for a good 144 billion euro. Finally, the ESM, still in operation unlike the other funds, lent Spain 41.3 billion, Cyprus 9 billion and Greece over 60 billion euro, just in between 2015 and 2018.
On the one hand, it is undeniable that these rescue packages to a great extent met the objectives of cutting public deficits and debts – or, at least, to slow down their sharp increase, like in Greece, where nonetheless the public debt rose from 299.7 in 2009 to 357.25 billion euro in 2018. On the other hand, the figures related to the GDP and to the employment are certainly not encouraging and the social costs have been and, in a number of cases still are, alarming.
A report of the Commissioner for Human Rights of the Council of Europe, published in November 2018, shows the dramatic effects of the austerity measures on social rights in Greece. The national health care system is on the edge of collapse: from 2009 to 2012 pediatric health care services were cut down of 73%, in 2015 the percentage of those who cannot get access to medical treatments was four times higher than the European average, while the request of mental health treatments has grown exponentially and the number of those – parents who could no longer look after their children, bankrupt and unemployed people – who were subject to a mandatory psychiatric hospitalization has substantially increased. Workers’ rights and trade unions’ freedoms have been severely limited and the unemployment rate reached the peak of 23%; the number of homeless has quadrupled since 2009; the suicides have grown by 40% between 2010 and 2015 and the education system has been deeply affected as well as the level of preparation of the students due to the cut in the public spending. An analysis published by the OCSE in 2018 confirms that a million and a half people, above all young unemployed people, lives below the poverty line (in a country of around 11 million inhabitants). Moreover, of the 700000 people who are believed to have left Greece to look for job opportunities abroad since 2010, the greatest majority are young and very well educated, 92% of whom with a university degree; a serious loss for the future of the country in terms of skills and productivity. To make the situation even worse, it cannot be neglected that the birth rate has significantly dropped. A recent study hypothesizes that the size of the Greek population could decrease in a range between 800000 and 2.5 million people by 2050, with predictable devastating effects on the “inter-generational balance” of the budget. These figures exemplify the impact of the crisis and of the conditions to which financial assistance programmes have been subject on a certain country and on the rights of its citizens and residents in the medium-long term. By the same token, the role of national representative institutions has been critically challenged.
Unfortunately, this scenario hardly admits a counterfactual analysis. A prediction of the social costs that alternative scenarios, such as default or debt restructuring, would have had and their comparison with the ones effectively occurred is beyond the scope of this mini-symposium and, possibly, of any legal analysis. In fact, despite being united by financial assistance programmes, the economic background of the “rescued” countries is barely comparable. In light of these difficulties, we have preserved a proper constitutional perspective of analysis and we have tried to understand what constitutional consequences stemmed from the crisis and from the related application of EU and international measures at the Member State level. Leaving aside the case of Cyprus – characterised by unique economic, social and geopolitical features – we have asked national experts to illustrate the most significant constitutional implications of the Euro-crisis in their country. We have suggested a set of topics of possible interest: i) budgetary procedures and the role of Parliaments; ii) Relations between the State government and regional/local authorities; iii) possible constitutional conflicts between supranational constraints and national constitutional identities; iv) workers’ rights and rights of pensioners, with special attention to the (im)balance of the social security system; v) protection of savings; vi) tax law reforms and principle of legitimate expectations.
Each author adopts his or her point of view and describes one or more “fragments” of his or her own country’s constitutional experience. These “bits and pieces” do not provide a complete picture of each national constitutional situation. Yet, every contribution points to issues and angles of analysis of Euro-crisis law that are deemed particularly meaningful and interesting both for the national and the international community of constitutional scholars.
For example, in the Portuguese report by Teresa Violante a novel interventionist approach of the Constitutional Court emerged during the crisis. This changed attitude generated an important political and scholarly debate. Similarly in many other countries, including Italy, the issuance of decisions by constitutional courts having significant consequences in terms of public expenditure and the fine-tuning of new decisional techniques attracted vast attention by many commentators. The Spanish note by Violeta Ruiz Almendral deals with the negative impact of the crisis on the role of the Autonomous Communities, which paid also the cost of their past irresponsible management (these stories resemble what recently happened in Italy as well). Alibhe O’Neill, from the Irish perspective, focuses on the very first case where the Irish Supreme Court expressly upheld a specific type of national governmental measure without any a priori parliamentary authorization, and namely the allocation of public funds to save some banks in the wake of the crisis. This is also the first case where constitutional provisions on public spending and the role of the Parliament in this field have been put to test. Once more, this is a familiar story in the perspective of the Italian reader, as latest developments connected with the approval of the 2019 Budget Law exemplifies. Lastly, Stylianos-Ioannis Koutnatzis and Georgios Dimitropoulos report some Greek developments, which probably are not very well known among the international readership. Their comment deals with the increasingly crucial constitutional role of tax law within the Greek legal system. As for substantive law, it is recognized wide room for the Parliament’s legislative discretion. However, as for procedural law, judges showed a growing active role in fighting against the abuse of procedural tricks, such as the last minute extension of statute of limitations, masking the inefficiency of the tax administration It goes without saying that these contributions may be complemented with additional ones, by adopting different perspectives and a fully systematic analysis. However, we hope that this mini-symposium will provide a useful addendum to the many essays, comments and notes available on the many aspects of the Euro-crisis. All the different aspects of the Euro-crisis are partially connected to purely national institutional, social and economic failures, as the notes we are here introducing show. If this is the main cue emerging from the general picture provided by these contributions, it could be a promising starting point for further investigation.
Suggested Citation: Pietro Faraguna, Cristina Fasone, and Diletta Tega, Introduction to I-CONnect Symposium: The Euro-Crisis Ten Years Later: A Constitutional Appraisal, Int’l J. Const. L. Blog, Feb. 19, 2019, at: