Portugal vs the Joffrey Baratheon of economic policies


Christ on a stick, that Portuguese Constitutional Court is a pain in the arse. This is the second bleeding time that they’ve ruled bits of austerity illegal. Will somebody please tell them they’re doing it wrong!

I don’t know if anybody’s noticed this, but it’s been just over a year since the EU’s Fiscal Compact was signed, the treaty that gives the European Court of Justice radical new powers to ensure compliance with permanent austerity in the eurozone and most of the not-so-eurozone (the UK and the Czech Republic excepted).

As a result of the Compact, the ECJ – which has been called a “rubber stamp for the EU institutions” by the editor of the European Law Review, legal scholar Damien Chalmers of the London School of Economics – is now the mouth-breathing, club-wielding mob enforcer for austerity.

Under the new treaty, the Court is to police the laws implemented to ensure budgets do not exceed three percent of GDP, that governments do not engage in “excessive macroeconomic imbalances” (which is not really defined, but you can bet that this does not include running deliberately neo-mercantilist economic and trade policies. I’ll not mention any names about who I’m referrring to there. Cough, Germany, cough), and that states bring down total government debt to 60 percent of GDP pretty damn quick – at an average rate of at least five percent a year until they get below the 60 percent reference point. For the average member state, this works out to be around a third of government debt.

If the required “implementation laws” – which are supposed to be made permanent, preferably constitutional – are not passed, the ECJ can hand out fines of up to 0.1 percent of GDP (it is presumed repeatedly) until a government corrects the problem.

The reason the court was given these powers was to remove the exiguous remaining sliver of democratic control over such matters. EU leaders of course don’t put it quite this way. They say instead that giving the court these powers will ‘depoliticise such decisions’. But it is exactly the same thing. De-politicise = de-democratise.

As Chalmers put it last year, shocked at the unprecedented control the judiciary had been given over fiscal policies:

“It might be thought that if national politicians decide to entrench a certain economic policy making model, it is ultimately their prerogative. They are accountable for that choice in both domestic and Union elections. Electorates can kick them out, if they wish, and bring in politicians who will change the policies.  However, whilst it will still be possible to give the politicians a good kicking, it will only be that: an exercise in political sadism which will probably be enjoyable, certainly fetishistic, but ultimately only empty. For this is where the Court of Justice comes in. It is there to ensure that the policies cannot be changed whilst the Union lasts in the current format … The Court of Justice judges ensur[es] that there is not the slightest expression of democratic deviation.’”

But now, the Portuguese Constitutional Court has gone and ruled that proposed cuts to pensioners and public sector workers, and reductions in sick pay and unemployment benefits were unconstitutional. The cuts were part of the quid pro quo for the 2011 bail-out for the Iberian nation demanded by the EU Troika. Last year, the same court put a halt to the government suspending payment of a pair of monthly salary payments for civil servants in 2013 and 2014.

Don’t worry though. It’ll all be all right. Responding to the constitutional court’s latest decision, Portuguese centre-right Prime Minister Pedro Passos Coelho says he’ll just slash spending on health and education more deeply than he’d intended instead, so it all balances out.

But all of this still comes at an awkward time if the whole point of snatching decisions out of the hands of elected parliaments and handing them over to unaccountable judges is that the judges are supposed to stick to the austerity line.

No matter, decides the commission. We shall carry on regardless of how hypocritical it may appear. From Sunday’s communiqué out of Brussels, directing Lisbon to disregard the court’s decision:

“Any departure from the programme’s objectives, or their re-negotiation, would in fact neutralise the efforts already made and achieved by the Portuguese citizens, namely the growing investor confidence in Portugal, and prolong the difficulties from the adjustment.

“The Commission therefore trusts that the Portuguese Government will swiftly identify the measures necessary to adapt the 2013 budget in a way that respects the revised fiscal target as requested by the Portuguese Government and supported by the Troika in the 7th review of the programme.”

And here’s where they say that if Lisbon does not do so, the government might just not get that relaxation of the payment period for the existing loans that they’d been all but promised:

“It is a precondition for a decision on the lengthening of the maturities of the financial assistance to Portugal, which would facilitate Portugal’s return to the financial markets and the attainment of the programme’s objectives.”

And, just to be on the safe side, make sure there’s a cross-party consensus on this, mmm ‘kay? So that voters don’t get any ideas that they can change things:

“The Commission reiterates that a strong consensus around the programme will contribute to its successful implementation. In this respect, it is essential that Portugal’s key political institutions are united in their support.”

Just so we’re clear here: Voters cannot be trusted with electing the right people, so we are taking fiscal decisions out of their hands and giving these powers to judges instead. Courts shall enforce austerity. Except of course if they don’t. In which case, courts shall be disregarded.

Austerity is the law. It is the permanent and irreversible law. Should any other laws conflict with this, austerity rests above these laws.

Basically, austerity has crowned itself king, untrammelled by the laws of men. It’s the Joffrey Baratheon of economic policies.

There is an old Latin legal term for this, Princeps legibus solutus est (“The sovereign is not bound by the laws”), a concept first described by Ulpian, a Roman jurist from Tyre. Black’s Law Dictionary explains Legibus solutus further: “Released from the laws; not bound by the laws. An expression applied in the Roman civil law to the emperor.”

Quod principi placuit legis habet vigorem.

What pleases the prince has the force of law.

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