Legal rights and the political economy of debt and austerity in Europe

Project Information

JUSECON

Grant agreement ID: 703063

DOI

10.3030/703063

Project closed

EC signature date 21 March 2016

Start date 1 August 2017

End date 31 July 2018

Funded under

• EXCELLENT SCIENCE - Marie Skłodowska-Curie Actions

Total cost

€ 86 238,60

EU contribution

€ 86 238,60

Coordinated by

EUROPEAN UNIVERSITY INSTITUTE
Italy

Periodic Reporting for period 1 - JUSECON (Legal rights and the political economy of debt and austerity in Europe)

Reporting period: 2017-08-01 to 2018-07-31

Summary of the context and overall objectives of the project

A central aspect of this research project is to bring together the state-of-the-art across a range of disciplines to study and bring to light the ways in which human rights have been circumscribed within the dynamics, intellectual justifications, logic and practice of contemporary global capitalism as played out under the European crisis of debt and austerity. This work is underpinned by a preoccupation that flows from the handling of the Greek debt crisis and the conflicts with basic requirements of democratic governance that it exposed. One part of this research project studies the possibility of denouncing agreements on economic conditionality, accepted under duress and that fail to conform to universal principles of sovereignty, democratic governance and the protection of human rights. Another aspect of this work considers the 'utility' of international human rights law in the area of socio-economic rights in advancing the harms of capitalism when deployed in the context of debt crises,
This research project draws on the researcher’s expertise and multidisciplinary approach to scholarship. Among its aim is to contribute to resituating social justice at the heart of economic and financial policy in Europe. The central findings cover both the legal significance of the democratic ideal to the validity of debt agreements and the role of the welfare state and the inadvertent uses that social rights play in sustaining the worst tendencies of capitalism.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

"Completed:
Title: Odious Debt, Adverse Creditors, and the Democratic Ideal (https://global.oup.com/academic/product/sovereign-debt-and-human-rights-9780198810445?cc=it&lang=en&#)
Authors: Margot E Salomon and Robert Howse

In the context of transitions from authoritarian rule to democracy, the notion of odious debt has often been raised as a claim to adjust or sever sovereign debt obligations, based on the purported odiousness of the previous regime and the notion that the debt it incurred did not benefit, or was used to repress, the people. Ultimately, the normative force of the odious debt doctrine comes from the primacy of the democratic ideal: when the debt was contracted not only was this done by a non-representative government but the debt served the purpose of that government in denying the political freedom of the people. But these are not the only cases where sovereign debt is in profound tension with democratic self-determination. As we can see most visibly in the case of Greece, sovereign debt may provoke a state of emergency or exception, where a democratic state comes under the tutelage of foreign creditors, whether governmental institutions or private actors, who are able to threaten the state with financial collapse if it does not accept these limits on democratic self-determination. In other words, debt may be contracted by a non-oppressive state for non-oppressive purposes, but nevertheless, for a period of crisis and often long beyond, the dependency on external actors such as creditors, including international financial institutions (IFIs), may fundamentally frustrate or attenuate democracy. As this chapter explores, the sanctity of democratic governance and the related principles that animate the doctrine of odious debt are important for our understanding of what is wrong with sovereign debt today. Applied in the context of the recent Greek debt and human rights crisis, we see how odious debt is applicable to debt incurred not only by dictators but by democracies and how, in the latter circumstances, international creditors are implicated in “hostile” acts against the demos. We conclude with suggestions on the remediation of odious debt today.
M.E. Salomon and R. Howse, ‘Odious Debt, Adverse Creditors, and the Democratic Ideal’ in I. Bantekas and C. Luminas (eds), Sovereign Debt and Human Rights (Oxford University Press, forthcoming 2018).

Work in progress:
Title (provisional): The Utility of Crises and the Regressive Development of International Human Rights Law

This work in progress is an inquiry into international human rights law and political economy. Through the lens of the debt and austerity crisis in Europe, this paper studies how welfare policy becomes an indispensable aspect of sustaining the processes of capitalist exploitation, dispossession, and accumulation and how international human rights law in the area of socio-economic rights might aid in that enterprise. Taking inspiration from Silvia Federici’s 1992 work on the ‘utility of debt crises’, this article explores responses to the recent debt crisis in Europe and the significance of that ‘crisis’ and ‘emergency’ for the regressive development of international law. In contemplating the ‘utility’ of those (regressive) legal developments this work uncovers how they serve dominant economic narrative theories and interests.

Speaking events:
During the course of the grant year the researcher was able to take advantage of several important opportunities to present her findings to academic and policy audiences. Events include the Expert Roundtable at the UN Office of the High Commissioner for Human Rights organised by the UN Independent Expert on Human Rights and Foreign Debt. The Roundtable was dedicated to developing Guiding Principles on human rights-based economic policy. The researcher also spoke at a conference at the Universite libre de Bruxelles on Austerity on Trial, as well as organised a workshop bringing together researchers in law, media studies, and political science to address the issue of Neoliberalism and Law in Europe. https://www.eui.eu/events/detail?eventid=144406
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Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

The research undertaken during the grant year seeks to see human rights deployed to support society and socially progressive policy. On the one hand the research harnesses the potential and demands of human rights to reread the social expectations placed on lenders in debt crises. This approach draws on the animating principles of the odious debt doctrine and also human rights to advance the ideals of sovereignty and democracy in debt crisis. The work will appear as a chapter in a wide-ranging and comprehensive volume on sovereign debt and human rights: M.E. Salomon and R. Howse, ‘Odious Debt, Adverse Creditors, and the Democratic Ideal’ in I. Bantekas and C. Luminas (eds), Sovereign Debt and Human Rights (Oxford University Press, forthcoming 2018). https://global.oup.com/academic/product/sovereign-debt-and-human-rights-9780198810445?cc=it&lang=en&

The second publication will be a journal article which is in its final stages of drafting. That article is provisionally entitled: The Utility of Crises and the Regressive Development of International Human Rights Law. Like the first piece of research outlined above, this study seeks to see human rights deployed to support society and socially progressive policy-making but it takes a different approach to the first piece. This work is critical of the role international human rights law in the area of social rights plays in debt crises in so far as it serves an inadvertent function of bolstering the worse tendencies of global capitalism.

The expected results are two published pieces and the exposure of important and novel ideas to a variety of academics, policy-makers, public officials, and NGOs. The ideas are a contribution to more humane policy-making in Europe and globally when it comes to debt crises and to accountable international institutions and organizations.