Print
See related documents
Resolution 1884 (2012) Final version
Austerity measures – a danger for democracy and social rights
1. Since 2009, strict austerity programmes
have been applied across Europe with the intention of consolidating
public budgets. More recently, both the economic effectiveness of
austerity measures and the root causes of the crisis are increasingly
being questioned by international experts and organisations. The short-
and long-term negative effects of the measures on democratic processes
and social rights standards have also come in for criticism.
2. The Parliamentary Assembly is worried about the impact of
current austerity programmes on democratic and social rights standards.
It is concerned that the restrictive approaches currently pursued,
predominantly based on budgetary cuts in social expenditure, may
not reach their objective of consolidating public budgets, but risk
further deepening the crisis and undermining social rights as they
mainly affect lower income classes and the most vulnerable categories
of the population.
3. In this context, the Assembly calls for a new evaluation of
the current crisis, which recognises the role of the large rescue
packages provided to European banks among its root causes. The Assembly
believes that it is necessary to disconnect the long-term question
of balancing public finances from the financial markets and their
specific dynamics and short-term interests. In the context of the
European Union, the prohibition of monetary financing of States
by the European Central Bank should be discussed.
4. Facing the consequences of “unbridled” economic liberalism,
the European social model and its various national expressions should
be protected as a common European vision, characterised by the general principles
of a “social market economy”, and the welfare State should be further
strengthened, including through new social partnerships placing
the human being at the centre of concerns.
5. The implementation of austerity measures is often linked to
bodies whose character raises questions of democratic control and
legitimisation, such as the so-called “troika” of the International
Monetary Fund, the European Commission and the European Central
Bank, or the newly composed, technocratic governments that have
recently been set up in several member States. The latest decision
to establish the interlinked European Stability Mechanism and European
Fiscal Compact is expected to further intensify the pressure on member
States to pursue new rounds of austerity measures.
6. The Assembly recommends a profound reorientation of current
austerity programmes, ending their quasi-exclusive focus on expenditure
cuts in social areas such as pensions, health services or family
benefits. It recommends taking measures aimed at increasing public
revenues by raising taxes on higher income categories and property
wealth, by shoring up the tax base and by enhancing tax collection,
the efficiency of the tax administration and the fight against tax
fraud and evasion.
7. With a view to overcoming the current crisis and ensuring
sustainable economic development, instead of the austerity approach,
energetic measures in favour of economic recovery should be taken,
based on the creation of new quality employment opportunities, equal
access to employment and support for young people in transition
from education to professional careers.
8. Although many of the decisions related to the so-called “sovereign
debt crisis” are taken in the realm of European Union institutions
and the eurozone, many countries of greater Europe feel the need
to further consolidate public budgets for various reasons, as they
continue to feel the impact of the persisting economic crisis. All
the member States of the Council of Europe should therefore be actively
involved when it comes to finding joint solutions to overcome the
current crisis situation in the most democratic manner, while ensuring full
respect for social rights.
9. With regard to the protection of human rights (including social
rights), the revised European Social Charter (ETS No. 163) remains
the main reference, while the Strategy for Innovation and Good Governance at
Local Level containing 12 principles of good democratic governance,
drafted by the Council of Europe in 2007, should be further promoted
as an important reference for modern democracies.
10. In the light of this evaluation, the Parliamentary Assembly
calls on the member States of the Council of Europe to:
10.1. prevent the undermining of existing
democratic standards when it comes to decisions linked to the “sovereign
debt crisis” and possible joint European action to be taken, by
preserving maximum possible discretion for national governments
and other national democratically legitimated institutions, in particular
parliaments;
10.2. reflect on how such processes could be made more democratic
in the future, also with regard to future economic policy making
at the European level, and, in the meantime, act with utmost transparency when
taking any far-reaching decisions which profoundly affect national
economies and people’s lives;
10.3. sign and ratify the revised European Social Charter and
the European Convention on Social Security (ETS No. 78), if this
has not yet been done, and consider supporting an update of the
latter in accordance with the needs of today’s work situations and
lifestyles, so as to improve the rights of member States’ citizens
to a level at least equal to the rights guaranteed by bilateral
agreements on social security;
10.4. where applicable, initiate a public debate on the social
consequences and the impact on democratic sovereignty if the European
Stability Mechanism and the European Fiscal Compact should come
into force;
10.5. consider measures aimed at modernising democratic structures
and processes by means of new forms of participation and consultation
of citizens, such as referenda, wherever the constitution or legislation
provide for such possibilities;
10.6. closely assess current austerity programmes from the point
of view of their short- and long-term impact on democratic decision-making
processes and social rights standards, social security systems and
social services, such as pension and health systems, family-oriented
services or assistance services to the most vulnerable groups (people
with disabilities, migrants, the unemployed, etc.);
10.7. design budget consolidation programmes not only based
on savings to be applied to government budgets at various levels
and social expenditure in particular, but also on higher income
to be generated, in particular through increased taxes on wealthier
income groups and large corporate profits, and a more resolute fight
against tax evasion, tax fraud, tax havens, corruption and the underground
economy;
10.8. wherever possible, supplement budget consolidation programmes
with measures fostering sustainable economic growth, including measures
aimed at creating new quality employment and the conditions and
economic environment for successful individual initiatives and entrepreneurship,
given that employment is a pre-condition for future tax revenues;
10.9. launch comprehensive economic recovery programmes aimed
at overcoming high rates of unemployment and their negative economic
and social consequences, including specific measures aimed at supporting
the young generation in the transitional period between education
and employment;
10.10. pursue and support efforts undertaken to increase the
regulation of the financial sector and of financial structures whose
size, systemic integration, complexity or interconnectedness may
jeopardise financial stability and the capacity of regulators to
resist their demands, including measures concerning the shadow banking
system, as requested by the European Parliament and as currently
initiated by the European Commission;
10.11. improve mutual information exchange, co-operation and
tax harmonisation, introduce joint measures geared to gradually
eliminating tax havens and fiscal grey areas and examine the possibilities for
introducing new taxes on certain types of financial transactions
across Europe.