Judging the Charter

The Charter in judicial practise with a special focus on the case of protection of refugees and asylum seekers

Leimonia Sotiropoulou v. EU Council

Case Number: T-531/14

Relevance of Decision

The applicants made claims related to articles 1 CFR on human dignity, 25 CFR on the rights of the elderly, and 34 CFR on social security and social justice. The Court based its decision partly on articles 34 and 52 CFR. In this case the General Court of the EU adjudicated the issue of EU non-contractual liability for damages incurred due to fiscal consolidation measures assumed in the aftermath of the 2009 economic crisis (see also joined Cases C‑8/15 P to C‑10/15, Ledra Advertising Ltd. and others v. European Commission and European Central Bank). The applicants, who are Greek citizens, sought to establish Union responsibility for what they saw as a severe curtailing of their social rights, as enshrined, among others, in the relevant Charter provisions. The General Court of the EU, however, found that the financial stability of the Euro area constitutes an “objective of general interest recognised by the Union”, capable of justifying restrictions to protected rights.

Facts of the case

Leimonia Sotiropoulou and the other applicants were employees of the Greek Telecommunications Organization SA and have retired according to the relevant procedure laid down in national law.

Because Greece’s debt crisis posed a threat to the economies of other Member States and to the stability of the Euro area as a whole, the Eurozone leaders and governments agreed to establish a transnational support mechanism for Greece.

The granting of loans under the support mechanism would be conditional and would follow a formal request on behalf of the Member State concerned. Greece, abiding by the relevant timetable, has undertaken a series of fiscal consolidation measures to reduce public spending and increase government revenue; to strengthen budgetary oversight and budgetary discipline and also structural measures to improve the competitiveness of the economy in general.

For the implementation of the fiscal adjustment measures imposed by the relevant decisions, Greece adopted laws and, consequently, the State Social Security Organisation issued relevant circulars.

Successive legislative provisions imposed the abolition of personal leave, Christmas and Passover holiday benefits for certain categories of pensioners, the reduction of primary pensions, the introduction of a special contribution to supplementary retirement insurance and the reduction of supplementary pensions.

The applicants requested that the Council of the EU provided restitution for their pecuniary and non-pecuniary damages, as resulted from the adoption of deficit reduction measures in accordance with the relevant Council Decisions.

Legal Questions

1. Are the fiscal measures adopted by Greece, pursuant to the relevant Council Decisions, attributable to the Council of the EU?

2. Does the adoption of these fiscal measures violate the principles of conferral and subsidiarity?

3. Does the adoption of these measures violate articles 1, 25 and 34 of the Charter?

4. Is the Council liable for damages?

Court Findings

The Court observed that the relevant decisions fall within the scope of articles 126(9) and 136 TFEU, and constitute an exercise of competence conferred therein. These provisions award the Council broad discretion, which is justified in view of their subject matter, i.e. regulating fiscal policy options within the Euro area. The Court found that the Council did not exceed its margin of appreciation in this case (paras 81-87).

As regards the applicants’ claims concerning the violation of Charter rights, the Court first recalled that in order for the EU institutions to be liable for non-contractually incurred damages, a flagrant violation of their competence in each particular case must be shown to have occurred. In this particular case, however, besides the difficulties in establishing a causal link between the relevant Council Decisions and the damages incurred, the Court underscored that that the infractions complained of may be justified in accordance with the provisions of article 52 of the Charter. Specifically, the Court observed that the right to access social security and social justice services may be restricted on grounds of general interest recognised by the Union, as long as these restrictions are necessary to meet the aforementioned objectives of general interest. Reducing pensions as a measure conducive to fiscal consolidation, the reduction of public spending and the bolstering of the Greek social security system clearly constitutes such an objective the EU may reasonably pursue, in the context of ensuring fiscal discipline in the Euro area Member States, as well as the financial stability of the Euro area as a whole (paras 88-89).

In light of the above considerations and the immediate risk to the solvency of the Member State concerned, the relevant measures, as envisaged in the Council Decisions and further specified in national legislation, cannot be construed as an infringement of protected rights. Hence, the Council did not issue the relevant decisions in flagrant violation of its competence, and the conditions for its non-contractual liability have not been fulfilled in this case (paras 90-93).