The research project “European Welfare State Constitutions After the Financial Crisis” started in January 2017 and was completed by the end of 2020. Its outcome is an edited collection on the reforms of social security benefits in European countries that were strongly affected by the financial crisis. The book was published in November 2020 by Oxford University Press.
Affected by the European financial crisis that erupted in 2008, a number of Member States of the European Union (EU) asked for financial assistance from other members of the European Monetary Union (EMU), from the newly created European assistance mechanisms (EFSM, EFSF, ESM) and the International Monetary Fund (IMF). In order to meet the conditions of financial assistance and to unlock successive tranches of the bail-out funds, the Member States in question had to adopt structural adjustment programmes aiming, inter alia, at the reduction of public expenditures. As a consequence, a number of social security benefits were reduced and a great number of structural reforms were introduced, since expenditures on social security benefits and public healthcare were considered to have a strong impact on the public budget’s macroeconomic balances. The far-reaching reforms in the field of social security and social assistance were in many cases experienced as violations of human rights by the respective right-holders, who sought for legal protection in national and international courts. As a result, many national constitutional courts, the Court of Justice of the EU, as well as the European Court of Human Rights issued a series of rulings on the conformity with human rights of reforms in social protection initiated during the Eurozone crisis.
Given the mounting concern about the implications of the reductions in social security benefits for the enjoyment of human rights, the Department of Foreign and International Social Law of the Max Planck Institute for Social Law and Social Policy elaborated an edited volume which offers a systematic analysis of the impact of the recent financial crisis and the conditionality set by international creditors on the national social security systems. For the realisation of this project, we have invited a group of distinguished legal scholars, experts in social security law and human rights from the respective nine European countries that were heavily affected by the financial crisis. The latter can be divided into three different groups: First, the non-Eurozone Member States (Hungary, Latvia and Romania), which received financial assistance from the EU, the IMF and the World Bank in the form of balance of payments support tied to the conditionality of the structural reforms. These countries are of particular interest, since to a great extent they served as precedent cases for the bail-out of Eurozone members. Second, bail-out countries that are Member States of the EMU and entered into an economic adjustment programme, namely Greece, Ireland, Portugal and Cyprus. Third, Italy and Spain are also of significant interest. Although in both countries crisis management measures were not officially prescribed by supranational organisations, their national governments received instructions aiming at the reduction of social security benefits. For example, Italy experienced strong informal pressure from the ECB to introduce reductions of public expenditures, while Spain received financial assistance from the ESM for the recapitalisation of its banking sector.
The purpose of this work was twofold: (a) to document and systematise the crisis-related reforms introduced in the field of social protection, covering old-age benefits, social assistance allowances, unemployment benefits and healthcare (b) to embed the reforms in social protection in the constitutional framework of each country by investigating the ways in which the application of constitutional law has changed during the crisis and the impact that this change had on the welfare states under investigation and their constitutions.
In order to achieve its objectives, the comparative study addressed four distinct legal research questions: (1) What were the most important reforms introduced in national social security systems after the economic and financial crisis? (2) What was the background of the reforms and how were they influenced by crisis management measures? (3) Which human rights and constitutional principles were affected by these legislative reforms and how did national courts deal with fundamental rights issues during the crisis? (4) Has the financial crisis and the conditionality set by the creditors influenced the constitutional doctrine of the countries affected and if so, to what extent?
By highlighting the national experiences, the edited collection aims to contribute to the ongoing global discussion about the strong impact of the financial crisis and the measures to combat it on the social security systems. In addition, as we are experiencing a new crisis as per 2020, the ultimate aim of the book is also to learn from the financial crisis and to identify whether and how social security benefits can legally and legitimately be reduced in times of crisis, so that human rights are not infringed. Last but not least, by covering a wide range of national social security reforms as well as national case law, the edited collection offers a rich comparative study and can serve as a legal platform for the assessment of the different national reactions to the financial crisis. In this sense, it is not only a helpful tool to legal scholars, but also to advocates in quest of sound legal bases for the protection of individuals affected by social security reforms, and to national and international judges, who are confronted with cases that question the legality and legitimacy of the reforms.