Are Greece's Loan Agreements and Austerity Measures Illegal? Greek Constitutional Law Scholar Says 'Yes'

While the Greek Parliament is preparing to vote on a third round of austerity measures this week, Giorgos Kasimatis, one of Greece's foremost constitutional scholars, argues that these measures are not only destructive but illegal.
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While the Greek Parliament is preparing to vote on a third round of austerity measures this week, a renowned Greek constitutional scholar argues that these measures are not only destructive but illegal. Giorgos Kasimatis, one of Greece's foremost constitutional scholars, has been critical of the loan agreements ever since the first one was signed in 2010. In a recent interview, Kasimatis argued that these agreements violate not only the Greek constitution but also EU and international law.

Kasimatis taught constitutional law at the University of Athens between 1973 and 2009 and served as a legal advisor to former Greek Prime Minister Andreas Papandreou from 1981 to 1987. He also played an active role in the drafting of the Greek constitution in 1975 and its revision in 1986.

"Many legal principles have been violated, which in turn nullifies the legality of these agreements," said Kasimatis. "The original memorandum did not go through the Hellenic parliament for approval. According to European and international law and the Greek constitution, all international agreements must be ratified by their respective countries' legislative bodies. This did not happen in Greece." Kasimatis added that not only did the original memorandum not attain the requisite parliamentary approval, but neither did the second memorandum that followed.

The illegitimacy of these agreements is not restricted to their improper ratification. The sovereign rights that Greece was obliged to surrender raises further questions about the legality of the agreements.

"The Greek state has relinquished all of its sovereign rights," according to Kasimatis. "This is unprecedented in an international agreement, particularly a loan agreement. A country has never given up all of its sovereign rights in such a way."

Greece's relinquishment of its sovereign rights goes further. As stated by Kasimatis, "the second unprecedented aspect of these agreements, which has not been seen in any loan agreement since at least World War II, is that all of Greece's public assets have been collateralized." This restricts Greece from making any financial agreements with other parties, even though Greece's lenders retain the right to transfer the loan to a third party.

Kasimatis did note that the original memorandum was declared constitutional by the Greek Council of State, Greece's highest administrative court. Kasimatis claims this decision was politically motivated.

"The decision by the St.E. violates basic tenets of justice," argues Kasimatis. "The court did not examine whether the agreements violate specific clauses of Greek or European or international law. Instead, the decision was based solely on the basis of Greece being in economic need. This is a political decision and not a legal decision."

Kasimatis, in discussing the decision of the Council of State, highlighted a potentially serious conflict of interest. He noted that the then-president of the Council of State, Panagiotis Pikramenos, was later named Greece's caretaker prime minister for the period between the May and June 2012 parliamentary elections. Kasimatis speculated that the government pressured the court to deem the agreements constitutional, and that a game of political give and take took place between the government and Pikramenos, who was later "rewarded."

While the Greek Council of State upheld the constitutionality of these agreements, courts in Romania and Latvia recently ruled that similar agreements were unconstitutional. The difference, says Kasimatis, is that those decisions were reached by the respective countries' constitutional courts -- a judicial body that does not exist in Greece.

Despite this court decision, Kasimatis argues that a future government in Greece could legally overturn them. He said, "There is a process foreseen by international law, but which Greece's political leaders do not wish to pursue, permitting the government to declare a stoppage of payments.... [T]hey could argue that the loan agreement itself is illegal, and that the amount of the loan is excessive and unsustainable." He highlighted actions taken by Nestor Kirchner in Argentina as a precedent that Greece could follow.

Kasimatis further stated that international law permits each country to cease the repayment of loans that are odious -- loans so massive that they cannot be repaid, and loans that endanger national security and the well-being of the populace. He argued that Greece could declare a stoppage of payments and ask its lenders to reduce the size of the loan and set new, legally permissible conditions. If the lenders refused, Greece could renege on the agreement and seek funding from other sources.

Here, too, precedent is on Greece's side, according to Kasimatis. He pointed out that Greece, under the dictatorship of Ioannis Metaxas in 1936, refused to repay a loan that had been borrowed from a Belgian bank, claiming that its repayment would threaten the country's stability. Greece successfully defended this decision in international court. More recently, and soon after the collapse of the Soviet Union, Russia successfully refused the repayment of a Soviet-era loan, arguing that the country did not have the economic means to repay without jeopardizing the nation's welfare.

"I believe that if the government did this, the lenders would accept, just as they did in Argentina," said Kasimatis, adding that "they wouldn't want to allow Greece to fall into the laps of Putin or any other third power seeking help."

While Kasimatis highlighted the legal means through which Greece could overturn the harsh austerity agreements, he accused the Greek media of censoring any discussion about the issue.

"Unfortunately, the mass media ... does not publicize viewpoints like mine," said Kasimatis. "Nobody can share such viewpoints through the media, but solely through speeches and the like."

According to Kasimatis, an appeal of the Council of State decision has been filed with the European Court of Human Rights, which is still pending. He also personally pledged to continue his own legal efforts against the agreements. He expressed his serious concern, however, with the policies that the European Union has been undertaking.

"My greatest concern ... is the danger which manifested itself in the 1930s, when human rights began to be violated by the fascistic regimes of Germany and Italy, ultimately leading to the outbreak of World War II," said Kasimatis. "That's why I am concerned today, because it is extremely dangerous for Europe to be proceeding with such a systematic process violating all principles of democracy and human rights, in conjunction with our government."

The podcast of the Dialogos Radio interview with Giorgos Kasimatis can be heard here.

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