Cyprus crisis, trust and the rule of law
You might be thinking, what the rule of law and trust have to do with the EU and the Cypriot banking crisis?
Last week our members debated what is essential for us as European social NGOs: we want a human rights based approach to EU policies to reach a socially just and cohesive society. A human rights based approach is, for us, the basis for trust, a basis that can propel confidence among Europeans in the policies being developed.
It also means that human rights are both an objective in themselves and a means to achieve other objectives. In simple words: the means are as important as the ends.
From this general principle, how can we analyse the Cyprus banking crisis. It is for me an example of the erosion of people’s trust in the EU’s promises and the non-implementation of the rule of law.
Why is it an erosion of trust? The European Council should adopt by next June a guarantee deposit scheme to ensure all Europeans that whatever happens, their bank savings will be protected up to 100,000€. However, on March 18, the Eurogroup gathering all ministers of finance from the Eurozone, agreed with a bailout plan that foresaw a 6,7% tax on savings up to 100,000€. That meant that instead of guaranteeing 100,000€, the EU guaranteed 93,300€ – not really the same. A week after that deal, we know that it was rejected by the Cypriot parliament and another deal was found last Monday reversing the decision. The question remains: what is the value of a commitment from the EU if it can be changed during one meeting?
Why is the rule of law questioned? A lot has been said about Cyprus being a tax haven with an oversized banking sector and assumptions that Russian bank account holders were using Cyprus for money laundering…but no proof. This was the basis for requesting account holders to heavily contribute to the bailout programme. The rule of law normally implies that people are believed innocent until proven guilty: all account holders in Cyprus who have been honest and trusted their bank with their savings are imposed a blanket decision that they cannot contest. If the EU is suspicious of the banking sector in Cyprus, investigations should be conducted and possibility to contest their assessment made possible.
It is not the first time that economic urgencies have taken precedence over a human rights approach. Under the troika programme, Portugal was forced to infringe on its own constitution guaranteeing free healthcare by imposing a minimal cost for all Portuguese when accessing healthcare. While in the UK the Prime Minister is making conditional the access to social security to EU migrants.
The means are as important as the ends – a human rights approach is more than ever needed for the EU.
Let’s engage
Pierre Baussand – Director
