Latvian Constitutional Court changes the world

press declaration by Sarah-Luzia Hassel-Reusing, 27.12.2009

On the 22.12.2009, few days before Christmas, the Latvian Constitutional Court has ruled that the cuts in the pensions - because of loan conditions of the International Monetary Fund (IMF) and of the European Union (EU) for a credit of 7.5 billions of euro - are incompatible with the Latvian constitution (Satversme) (file number 2009-43-01).( 1) All pensions have been reduced by 10% for still-working pensioners even by 70%. (2) According to the basic principles of the judgment, a part of the new pension law is void from its beginning, and other parts have to be replaced by a constitutionally compatible version until the 01.03.2010. Art. 1 (sovereignty, democracy), 91 (equality), and 109 (social safety with regard to old age, to inability to work, to unemployment, and to other cases regulated by the law), have been violated. The Latvian legislator could reduce social public spending in times of shorter financial resources, but only as far as the basic rights allow this. Already in an earlier judgment the Latvian Constitutional Court has had decided that cuts within the social security system are permissible for the purpose of the long-term securing of the social system. The court, however, regards the actual cuts as disproportionate. Possibly milder possibilities to reduce the costs have not been examined careful enough and special provisions to make sure that no-one sinks because of the cuts below the minimum of social security (which is) prescribed by the constitution.

In addition to that, the Latvian Constitutional Court held, that the basic rights of the Latvian constitution must not be limited by international agreements. While art. 91 and 109 contain basic rights, art. 1 of the Latvian constitution contains structure principles. So the court has stated for Latvia a preeminence of the Latvian basic rights and of the Latvian structure principles before any international law. It has, in addition to that, ruled that the Latvian government may conclude international treaties only with the authorization of the parliament (see art. 68 of the Latvian constitution) – inclusively loan agreements with international organisations like the EU or the IMF.

One may wonder, if there will be constitutional complaints also with regard to the closure of hospitals and the lay-offs in the health sector (3), which have had been enforced by the IMF holding back credit rates, because art. 111 of the Latvian constitution guarantees every inhabitant of Latvia the protection of health and the basic medical supply.

The 22.12.2009 judgment has also effects on European and world policy. Already the German Constitutional Court had held in the first Lisbon judgment (4) at the 30.06.2009 in basic principle no. 4, that the constitutional identity of the Basic Law (German constitution) is higher-ranking than the EU law. The constitutional identity (art. 79 par. 3 Basic Law) contains at Germany the basic rights and the structure principles of the Basic Law (no. 217 and 218 of the first Lisbon judgment). In addition to that, according to the German Constitutional Court judgment of the 30.06.2009, the „tasks of the state“ peace and European integration stand above the EU law.

The Latvian judgment is a milestone for the protection of especially the basic rights, democracy and the rule of the law as well as for the return to normality in the international law. The IMF can autonomously formulate its loan conditions, but it has to accept, that these conditions are complied with only as far as they are compatible with the constitution of the respective country, especially with the basic rights and structure principles. In contrast to the EU law, the IMF law stands, because of the sovereignty (art. 2 par. 1 UN Charter) of the states clearly below all national constitutions and also below the UN Charter (art. 103 UN Charter). All states of the world can now refer to the Latvian Constitutional Court decision – exactly as far as the IMF conditions are incompatible with their constitutions or with international law, which is higher-ranking than the IMF law.

Also the decision, that credit agreements with the IMF depend on the authorization by the parliament as well as other international treaties, is a milestone. Hitherto, in many states of the earth, laws have been changed because of IMF conditions without informing the public and the parliament with regard to the IMF background. This non-transparency should be over now in many states.

In the following a few examples of the violation of basic rights and of structure principles of national constitutions and of universal UN human rights by IMF conditions:

• starvation because of cuts in food subventions at Bolivia (1985), Zambia (1986), Venezuela (1989), and Jordan (1989) (5)
• privatization of the water supply at South Africa because of IMF conditions even though the basic right to water (art. 27 par. 1 lit. b of the South African constitution) (6) (7)
• denial of food aid from the public millet stocks of Niger during the starvation catastrophe in 2003, because the IMF has been afraid of distortions of the competition (8)
• IMF demanded in 2009 the privatization of the Turkish financial authority (9)

Also at Germany, there are violations of basic rights, structure principles and human rights of the UN social pact because of IMF conditions. (10)

The IMF has, e. g., sent recommendations respectively demands towards Germany at the 11.09.2006. In no. 5 of these recommendations, the IMF has demanded to reduce the job seeker’s allowance II („Hartz IV“) for long-term jobless people by 30%, if they do not try hard enough to find a job. This has been exceeded by Germany with the aggravation of the job seeker’s allowance II at 2007. Now, according to §31 par. 5 of the second social law book (SGB 2), in cases of insufficient proofs of job applications, the job seeker’s allowance II has to be reduced by 30 % steps – in cases of several times lacking proofs down to 0,- euros. The IMF has „only“ demanded one such 30% step. Whenever such a reduction takes place, the law puts, for Germany, the granting of benefits in kind for the very survival into the deliberation of the state. So the IMF has brought the hunger to Germany, to the illiterates, to the dyslexics, to the inhabitants with little knowledge of the German language, and to all other persons, who are able to work, but who have difficulty in proving their job applications. In no. 14, the IMF has demanded, at the 11.09.2006, cuts in pensions, and in no. 15 cuts in the health system, in order to prevent the health fund from becoming too expensive.

The IMF will, if enough states, ngos, and parties will take this historical chance, very soon have to accept first the preeminence of the national basic rights and structure principles and then also of the universal human rights.

One of the next steps for the limitation of the IMF power should be to strip it of its states as a UN special organization. For this status has the effect, that IMF can, legally, draft its conditions without regarding the UN Civil Pact and the UN Social Pact (art. 24 UN Social Pact, art. 46 UN Civil Pact). Here is action by the UN General Assembly needed, because the canceling of the treaty, which makes the IMF being a UN special organization, would close this gap. This is crucial, in order to protect also those human beings, whose national constitutions contain less social human rights than the Social Pact of the United Nations. In addition to that, the immunity of the IMF employees (see IMF statutes) should be removed at least, whenever they disregard the preeminence of the national constitutions. The chances to civilize the often brutal IMF conditions, are good as never before, because the US people will, in view of, simultaneously, the record indebtedness and the fall of the dollar exchange rate, soon urge for the ratification of the UN Social Pact, because the US constitution does not contain enough social human rights, in order to protect the social security of the American people against the conditions of the creditors of the USA.

V.i.S.d.P.:
Sarah Luzia Hassel-Reusing
Thorner Str. 7
42283 Wuppertal (Deutschland / Germany)
human rights and civic rights activist

sources:
1 press statement of the Latvian Constitutional Court on the judgment in English language

2 newspaper taz, article of the 23.12.2009 „Lettland kippt von EU und IWF erzwungene Rentenkürzung“

3 taz article „In Lettland gehen die Lichter aus“ of the 14.08.2009

4 Lisbon judgment of the German Constitutional Court of the 30.06.2009

5 „Zum Beispiel IWF & Weltbank“, Uwe Hoering, Süd-Nord Lamuv-Verlag, S. 28+29

6 „Der Vierte Weltkrieg“ (Film von www.bignoisefilms.com, at Europe distributed by www.cinerebelde.de)

7 basic rights chapter („Bill of Rights“) of the South African constitution

8 Germanwatch interview with the then UN Special Rapporteur for the human right to food, Prof. Dr. Jean Ziegler „Ein Kind, das heute verhungert, wird ermordet“.

9 taz article of the 07.10.2009 „Weg vom IWF-Diktat“ on IMF demands to Turkey

10 IMF demands to Germany of the 11.09.2006