The Loan Agreements between the Hellenic Republic, the European Union and the International Monetary Fund

(Translation in English: Stavroula G. Vryna)



1. The frame of provisions.

2. Lawfulness of conclusion and legal validity of the loan agreements.

3. The content of the Loan Agreements from the scope of the Greek Constitution and that of fundamental principles of European and international law

a. The waiver of all immunity pertaining to Greece’s sovereign status

b. The transfer of Greece’s lenders’ rights arising from the Loan Facility Agreement

c. The request for a Legal Opinion by Legal Advisors to the State regarding the lawfulness of the Loan Facility Agreement

d. Lenders’ rights in case of cancellation of Agreement terms.

e. Violations of the Greek constitution

4. Memorandum of Understanding policies incompatible with the level of guaranteed protection of fundamental rights

a. The common frame of guarantees in superior law.

b. MoU provisions found incompatible with the level of guaranteed protection of fundamental rights.

i. Protection of property

ii. Protection based on the fundamental principles of the rule of law; certainty of law and respect for legitimate expectations

iii. Protection of social rights and welfare state

5. Statute 3845/2010 – The first implementation of MoU policies

a. A statute in execution of international treaties prior to their ratification

b. The violation of the constitutionally prescribed sequence of: conclusion-ratification-application and its implications

c. Overriding of the authority of the Hellenic Parliament.

d. Statute 3845/2010 as an unconstitutional framework law

e. The introduction of the Loan Agreements to the Hellenic Parliament and their lack of ratification as violations of the Constitution

6. General Overview of the Loan Agreements from the scope of European Union law and the principles set out by the Council of Europe


As the reader will realize at the outset; the present essay does not constitute a full and detailed study on neither the nature; nor the lawfulness or the legal implications of the Loan Agreements; or even on the individual legal issues their provisions and terms bring forth at the detriment of the people.

The Loan Agreements (the Loan Facility Agreement; the Memorandum of Understanding between Greece and the Euro-area Member States and the agreement with the IMF for the Participation of Greece in the European Financial Stabilization Mechanism to the purpose of obtaining the approval of a Stand-by arrangement by the International Monetary Fund) form a system of international treaties the likes of which; judging by the orchestration of negotiations that led to their conclusion; their entry into force and their consequent application or moreover; the cruelty of terms and the extent of breach of fundamental legal rights and principles; have never been enacted in the heart of Europe and the European completion; not since the World War II.

The cause for the concern of every Greek citizen in view of the aforementioned Loan Agreements is twofold: first of all; because the political motives behind the formulation of their terms constitute a major threat to the Hellenic Republic and a violation of its legal order and secondly; because the content and terms of the said Agreements constitutes a subversion of the principles forming the European legal environment and the spirit of the European completion. The latter of these debates; should also be –if it is not already- a cause for concern on the part of European citizens.

This twofold issue –of Greek as well as European interest- motivates the author of this essay to enunciate a political statement in his capacity as a citizen: The request for the abolition of terms

that infringe upon the principles of Hellenic and European legal orders alike.

It is for those reasons that the following essay; does not limit itself to rigid legal analysis – the author asking for the indulgence of legal science dogmatists in doing so - albeit it makes a political statement; in the sense that it brings forward questions of a political nature. However; those political questions pertain to the politics of law and stem from viewing an individual’s political actions as the actions of a “political being” striving to achieve the “ευζήν” (well being) as prescribed in the works of Aristotle; and not from the globally dominant Machiavellian view of politics. It is of the outmost importance that everyone –political and legal scholars in particular- has this distinction in mind.

The present essay is a small tribute to the Athens Bar Association; as a small token of gratitude for its history of striving for the preservation of democracy; as well as civil and social rights. As well as a token of my personal gratitude; for since I was a young legal scientist in its halls; I have been a part of many such strives and on the receiving end of numerous new ideas.

At this point I would wish to exert the paramount importance of the initiative the President of the Board of the Athens Bar Association; Mr. Dimitris Paksinos and its members; to be the first to organize the current strife towards the safeguarding and restoration of fundamental democratic principles and the rule of law; as well as towards defending fundamental rights of Greek citizens; mainly pensioners and employees; that have been infringed upon by the Loan Agreements.

In particular; I would like to sincerely thank the President of the Athens Bar Association for the honor of inviting me to be at the head of the team of lawyers undertaking this project as coordinator.

Numerous lawyers and university professors have offered their contribution to this essay; and for their significant moral and substantive support I am most appreciative. In particular; I would

like to thank the ladies and gentlemen of the team of lawyers for their essential scientific contribution: Cheirdaris Vasilis; Marias Notis; Samartzis Konstantinos; Belantis Dimitrios; Koufaki Ioanna; Leontopoulos-Vamvetsos Alexandros; Tsipra Maria; Tagaris Dimitrios; Kontogeorgopoulou Pavlina.

I also express my gratitude towards Evgenia Prevedourou; professor at the University of Thessaloniki and Georgios Katrougalos; professor at the University of Thrace; for their contributing of case-law material for the present study.

Last but not least; I would like to thank the Athens Bar Association for its generous offer of publishing the present essay.

Kithira; September 2010 Giorgos I. Kasimatis

1. The frame of provisions.

A bill was introduced to the Hellenic Parliament dated 3rd June 2010 and bearing the title “Ratification of the Loan Facility Agreement between the Hellenic Republic as borrower (the Borrower) and the fifteen Euro-area member-states as lenders (the Lenders) dated 8th May 2010” as well as “The Stand-By Arrangement with the International Monetary Fund – Participation of Greece in the European Financial Stabilization Mechanism” of 10th May 2010.

The international treaties included in the bill are the following: a. The “Loan Facility Agreement” between the Hellenic Republic and the Euro-area Member-States dated 8th May 2010; by which the aforementioned fifteen member-states have agreed to provide Greece with a sum of €; with its seven Annexes (The Agreement). b. The “Memorandum of Understanding” of 3rd May 2010; between the Hellenic Republic and the European Commission acting as an agent of the Euro-area Member-States which includes: the Memorandum of Economic and Financial Policies; the Memorandum of Understanding on Specific Economic Policy Conditionality and the Technical Memorandum of Understanding c. The agreement between the Hellenic Republic and the International Monetary Fund (IMF); by which the IMF approves the “Stand-By Arrangement” and the participation of Greece in the European Financial Stabilization Mechanism.

The Loan Facility Agreement is completed by the following annexes: Annex 1. List of lenders; Annex 2. Form of Request for Funds; Annex 3. Form of Acceptance Notice Annex 4.Form of Legal Opinion

( in particular a Form of Legal Opinion of the Legal Advisor to the State of the Ministry of Justice; …. And the legal councilor to the state of the Ministry of Finance (Legal Opinion of the Legal Council of State); Annex 5.EURIBOR Setting Rules; Annex 6.Form of Assignment Agreement; Annex 7. List of Contacts.

Prior to the Loan Facility Agreement there is an Intercreditor Agreement which defines the frame of rights and obligations of the Euro-area member-states as lenders to Greece. The following Annexes; constitute an integral part of the Intercreditor Agreement: Annex 1. List of Parties with their respective Commitments (in Euros); Annex 2. Contribution Key; Annex 3. Special case of higher funding costs; Annex 4. Template for Commitment Confirmation; Annex 5. Template for Drawdown Notice.

The above Agreements introduced to the Hellenic Parliament with the question of ratification; by the said bill of 3rd June 2010; constitute the frame of international treaties concluded by Greece as part of the strive to rise above its financial crisis. (The Loan Agreements)

It is stressed that the Memorandum of 3rd May 2010 was signed as a political document by both the Minister of Finance and the Governor of the Bank of Greece; it was thus concluded as a binding international treaty being attached to the “Loan Facility Agreement” of 8th May 2010. The Agreements as well as and their respective Annexes –which are considered integral parts of the each Agreement and share their legally binding status-; are interconnected and interrelated in such a way that they form a uniform system of binding provisions; so that the validity of each one cannot be taken into account separately from that of the others.

It is further noted that according to a special clause of the preamble to the Memorandum of Understanding; future revised versions of the Memorandum will be considered Annexes to the First MoU and will constitute integral parts of it. Two days before the signing of the Loan Facility Agreement and the Memorandum of Understanding and four days before the approval by the IMF of the “Stand-by Arrangement”; statute 3845/2010 was voted by the

Greek Parliament through the special procedure reserved by the Constitution for bills of a “very urgent” nature; bearing the title: “Policies enacted in application of the support mechanism of the Greek economy set out by the EU and Euro area member states and the IMF”. The above law is comprised of seven articles the numbers of which are written in full as is the usual case in statutes voted for the ratification of international treaties also including provisions aimed at the execution of the treaties; and four Annexes; the fourth of which is divided in four other Annexes. Annex I of the statute is a document entitled: “Statement by the Heads of State and Government of the Euro area member states” dated 25th March 2010 in Brussels. Annex II contains the “Statement on the support to Greece by Euro area Members States” both in English and in Greek and dated 11th April 2010 in Brussels; Annex II contains a document bearing the title “Greece – Memorandum of Economic and Financial Policies” dated 3rd May 2010. The fourth Annex is entitled: “Greece- Memorandum of Understanding on Specific Economic Policy Conditionality” also dated 3rd May 2010. The three annexes to Annex IV of statute 3845/2010 are the following: Annex I. Supply of data; Annex II. Financial Stability Fund and Annex III. Conditions of Structural Reform. Paragraphs 1-3 of article One of the statute stipulate that the documents found in the four Annexes constitute the basis for the establishment of the “Support Mechanism of the Greek Economy” according to the “Statements” by the Euro area member states and the IMF in Annexes I and II. The two Memoranda (Annexes III and IV) are part of a “Program Plan” for the application of the support mechanism which was conducted by the Ministry of Finance and was forwarded to the president of the Eurogroup; to the European Commission; the European Central Bank and the International Monetary Fund. Paragraph 4 of article One of the same statute states that “The Minister of Finance is vested with the authority to represent the Hellenic state and sign any Memorandum of Understanding; loan agreement or contract; either bilateral or multilateral with the European Commission; the

EU member states; the International Monetary Fund and the European Central Bank to the purpose of implementation of the hereinabove program. The above Memoranda; agreements and contracts are introduced to the Parliament to be sanctioned.”

By this authority the Minister of Finance signed the Loan Agreements. Five days after the publication of statute 3845/2010; three days after the conclusion of the Loan Facility Agreement and the Memorandum of Understanding and one day after the approval of the “Stand-by Arrangement” by the IMF; the final sentence of paragraph 4 of article One was amended by the entry into force of statute 3847/2010 as follows: Article One paragraph 9: “The hereinabove Memoranda; agreements and contracts are introduced to the Hellenic Parliament to the purpose of briefing and discussion. They acquire validity and enforceability as of their signing.” This amendment was obviously carried out in conformity to article 15 of the Loan Facility Agreement; which specified the entry into force of the Loan Agreements; as of their signing; without taking into account the fact that conformity to that particular provision of the Agreement was unconstitutional or that the Loan Agreements had not received ratification in compliance to the constitutional requirements for their entry into force.

We can’t help but wonder why following the above amendment and in direct violation of the constitution; the Loan Agreements were introduced to the Parliament for ratification; particularly since the request for ratification had been replaced by the “briefing and discussion” and their signing date had been set as the day of their entry into force. Maybe the answer is that the contracting parties –particularly the Minister of Finance who had the authority to introduce the Agreements for ratification- were cognizant of the unlawfulness of the amendment.

Moreover; their introduction in Parliament almost a month after their official entry into force; gave the Agreements a status of

established and settled law; while crucial details of their provisions did not become the object of debate.

Articles Second to Sixth of statute 3845/2010 contain provisions introducing policies aimed at the application of the “Support Mechanism of the Greek Economy by Euro area member states and the International Monetary Fund”; as stipulated in the title of the statute; while article Seventh determines the entry into force of the statute’s provisions.

2. Lawfulness of conclusion and legal validity of the Loan Agreements.

According to the Greek Constitution (art. 36 par. 1) the President of the Republic is the only competent authority for the representation of the state for the purpose of the conclusion of international treaties. The competence for conclusion of international treaties also includes competence for its subsequent ratification. Article 36 par. 2 prescribes that “Conventions on trade; taxation; economic cooperation and participation in international organizations or unions and all others containing concessions for which; according to other provisions of this Constitution; no provision can be made without a statute; or which may burden the Greeks individually; shall not be operative without ratification by a statute voted by the Parliament.” Therefore the Constitution apart from the acts of conclusion and ratification also requires the sanctioning of the treaty by a legislative act.

In practice; in a contemporary democratic state where all negotiations and conclusions of international treaties are carried out by the politically accountable Executive body (the Government); the President’s competence for the ratification of

international treaties merely a formality and is fulfilled by exchange of ratification instruments through the Ministry of Foreign Affairs with the signing of which; the conclusion of an international treaty is completed.

Internationally however a more simplified procedure of conclusion is also applied. Such types of treaties are usually named “International Treaties in simplified form – Simplified Form Treaties”. This simplified procedure overrides the President’s competence for ratification whereas the sole signature of the representatives of the contracting parties is required.

In other words such international treaties; enter into force acquiring a legally binding status towards the contracting states from the moment of their signing. However; in cases when one of the constitutions of the contracting states demands a condition of sanctioning by the state’s legislative body for the lawful conclusion of a treaty -as is the case in Greece based on the hereinabove art. 36 par. 2- the application of such a simplified procedure cannot result in disregarding this additional condition.

This simplified procedure –a common practice in Greece mainly for the conclusion of international treaties concerning economic matters- was the one applied for the conclusion of the Loan Agreements; the Loan Facility Agreements and the Memorandum of Understanding being concluded solely through the signature of the particular state representatives stipulated in the Agreements; while for the conclusion of the Approval of the Stand-by Arrangement; the exchange of documents by the lawful representatives of the contracting parties was deemed sufficient.

The request for ratification by the enactment of a statute was not abided by; even though it is an essential prerequisite even of Simplified Form Treaties; noting that the Loan Agreements include provisions pertaining to all categories of international conventions named in article 36 par. 2. Namely; they incorporate provisions imposing taxation policies; an economic cooperation with EU

member states through the supply of loans; severe concessions in state sovereignty; while most importantly placing individual burdens on the Greek people (wage/pension cuts etc.).

The disregard of an essential part of the conclusion procedure of the Loan Agreements; namely the sanctioning by the enactment of law; affect the legal validity of the said Agreements with respect to international law.

At this point we should mention that according to art. 15 of the Loan Facility Agreement; its entry into force –which constitutes also an entry into force of all the Loan Agreements due to their interrelation- was subjected to two terms: first of all; the receiving of the Legal Opinions by the Legal Advisor to the State at the Ministry of Justice; Transparency and Human Rights and the Legal Advisor to the State at the Ministry of Finance in the form of Annex 4 of the Agreement and secondly by the obtainment of Commitment Confirmations from a Critical Mass of Lenders.

In reality; taking into account the fact that those two terms had been fulfilled by the time of the signing of the Agreement; the genuine date of its entry into force was that of its signing; thus giving it immediate effect while no sanctioning had taken place; nevertheless they entered into force as of the signing date.

Apart from art. 36 par. 2; article 28 par. 1 of the Greek Constitution stipulates that international conventions “shall be an integral part of domestic Greek law as of the time they are sanctioned by statute and become operative according to their respective conditions”. Leaving aside issues concerning the use of the terms ratification and sanction in articles 36 par. 2 and 28 par. 1; and according to the more correct interpretation of article 28; the Greek constitution requires a sanctioning by statute of any international convention irrespective of whether it falls into one of the categories of conventions of art. 36. Given that the Loan Agreements have not yet been sanctioned by statute; via the combined interpretation of articles 36 and 28; the said agreements have not acquired a legally binding status in the domestic legal order in the sense that they

provide no basis of obligation nor are they capable of having any legal impact on the Greek legal order.

As far as the issue of the entry into force of the Loan Agreements is concerned; we have to remark that the ratification requested by art. 36 par. 2 could be postponed or delayed as is the case in international practice; without it interfering with the legal validity of the agreement. Without the sanctioning required in art. 28 par. 1 though –which would uno actu also incorporate the above ratification- the Agreements lack the grounds for domestic legal validity and therefore all acts in execution of them have to be regarded as unconstitutional and thus invalid.

Article 28 par. 2 of the Greek Constitution states that: “Authorities provided by the Constitution may by treaty or agreement be vested in agencies of international organizations; when this serves an important national interest and promotes cooperation with other States. A majority of three-fifths of the total number of Members of Parliament shall be necessary to vote the law sanctioning the treaty or agreement.” It is obvious that the Loan Agreements constitute a vehicle for the vesting in institutions of international organizations (EU; IMF; ECB); and sovereign states (EU member-states as Lenders) of authorities pertaining to all three branches of government according to the Constitution: (a) the executive branch; namely the President of the Republic; the Government; ministers and undersecretaries as well as administrative institutions (articles 26 par. 2; 82; 83; 43; 44; 101 of the Constitution) (b) the legislative branch; namely the Parliament and the President of the Republic (articles 26 par. 1; 64; 73; and 42 of the constitution) and finally (c) the judiciary branch; namely Greek courts (art. 26 par. 3 and 87).

The hereinabove mentioned authorities are transferred by the Loan Facility Agreement and the Memorandum of Understanding to institutions of the EU (the European Council; the European

Commission; and the European Central Bank); the IMF and EU member-states.

To what concerns the category of governmental authorities which -based on the Constitution- are reserved for the President of the Republic; the Government and members of the Government and authorities belonging to administrative organs and services; the vesting of authority is manifested throughout the Memorandum of Understanding in combination with provisions of the Loan Facility Agreement.

We will proceed to refer to certain executive capacities that are vested in institutions outside of Greece: According to articles 3 (4); (5); 4 and 10 of the Agreement in combination with provisions: i. of the Memorandum of Economic and Financial Policies (articles ΙΙΙΙΙΙ and ΙV along with the necessary Annexes) that stipulate and impose specific policies whose undertaking the Greek constitution assigns to the Government ii. Of the Memorandum of Understanding on Specific Economic Policies Conditionality (art. 1-7) that prescribe specific economic policies as conditions to the disbursement of the loans; iii. of the Technical Memorandum of Understanding; that set out certain technical standards of governmental decisions in the direction of achieving Greece’s economic reform (ex. Quantitative performance indicators; monitoring of the pension structural reform benchmarks).

As for the administrative authorities; those include: (a) The competence to execute and apply the aforementioned governmental decisions and statutes in execution of the Loan Facility Agreement and the MoU which is carried out in by the issuance of regulatory acts (presidential decrees; ministerial decisions; acts by administrative organs) and (b) monitoring authorities; already executed by agents of the European Commission; the ECB and the IMF.

ii. The second category of authorities taken away from the decisive competence of our legislative body; includes the enactment of all statutes either already published or to be published in the imminent future in execution of provisions of both the Loan Facility Agreement and the Memorandum of Understanding; and which formulate the above mentioned governmental decisions.

Legislative authorities include: foremost; all those authorities expressly and directly assigned to the legislative body [ex. Memorandum of Economic and Financial Policies 1 (vi); 3 (i)] moreover; the enactment of all Statutes that the constitution requires voted for the purpose of stipulating obligations or imposing any restrictions on rights.

The regulatory framework prescribed in the Loan Agreements as well as laws in execution of this framework are definitely not the product of the legislative power of the Hellenic Parliament; they are merely the will of Greece’s body of lenders taking on the role of government. What is more; the subjection by art. 14 of the Loan Facility Agreement of any dispute arising from the Loan Agreements to the English law; is a jurisdictional provision that should have lawfully been prescribed by a decision of the Greek legislative body.

Concerning the third category of authorities -those of the judicial- articles 14 (2) and (3) of the Agreement transfer judicial authorities to the European Court of Justice.

It is obvious that those of the aforementioned authorities of Greek institutions vested in the EU are newfound and specified and thus are not considered incorporated in the body of authorities vested in the EU at the time of the accession of Greece in the Union and the Euro zone. Therefore it is required that the vesting of further

authorities be founded on a sanctioning statute according to art. 28 par. 2 of the Greek Constitution.

Based on the above arguments and the combined view of articles 36 par. 2 and 28 par. 1 and 2; the completion of the conclusion process of the Loan Agreements and their acquiring of a legally binding status as an integral part of domestic law; their uno actu ratification and sanction by a statute passed by the Plenary session of the Hellenic Parliament by a majority of three-fifths of the total number of Members of the Parliament is required.

Nonetheless; the above prerequisites prescribed by the Constitution in order to achieve the adequacy of obtained information; a genuine debate and finally a rational political decision of the representatives; were not met. Quite the opposite. In the effort of giving the austerity policies prescribed in the Loan Agreements a mask of lawfulness by international and domestic law standards; the two sentences of paragraph 9 were added as an amendment to the first article of statute 3847/2010 -a matter discussed earlier in the essay- thus by means of standard law disregarding and abolishing the constitutionally required ratification and sanction of any international treaty and substituting them with a plain discussion and a briefing of the Parliament.

What is more; apart from the abolishment of ratification and sanction by the Parliament; the hereby amendment states that the Loan Agreements “enter into force and are executable as of their signing.” It is self-evident and not in need of a stern legal analysis that the above provisions are blatantly unconstitutional and thus invalid.

3. The Content of the Loan Agreements from the scope of the Greek Constitution and the fundamental principles of European and international law.

The international treaties forming the frame of the Loan Agreements (Loan Facility Agreement; Memorandum of Understanding; Approval by the IMF of the Stand-by Arrangement) are the end result of a series of negotiations between the Hellenic Republic; the EU member states and the IMF.

Parts of those negotiation talks were released to the public through the political documents attached as Annexes to statute 3845/2010. As announced in the “Statement on the support of Greece by Euro Area Member States.” of 11th April 2010 the above member states “have agreed upon the terms of the financial support that will be given to Greece” which determines the time of their agreement at least twelve days before Greece’s official request to the EU and the IMF for financing through pooled bilateral loans; dated 23.4.2010 and a whole month before the completion of the conclusion of the Loan Agreements. This proves certain amplitude of time remaining for both the fulfillment of conclusion prerequisites set out by the Constitution and the assessment the compliance of the terms of the Agreements with the law.

Despite the significance of the Loan Agreements for the state’s economic wellbeing and in spite of their terms of unprecedented austerity; those international treaties were concluded and their terms admitted without prior parliamentary debate and sanctioning by law; violating both the parliamentary and the representative principle of democracy and the Greek Constitution.

Apart from that; certain essential terms of the loan agreements are in violation both of the Greek Constitution and fundamental rules and principles of international and European Law.

The nature of some of those terms is new to contemporary international law practice and transcends any boundaries set by law as far as the economic relations of countries of the international community especially those of EU and Eurozone member-states are concerned.

Let us take a closer look at those terms:

a. The waiver of all immunity pertaining to Greece’s sovereign status.

According to art. 14 (5) of the Loan Facility Agreement; the Greek state irrevocably and unconditionally waives all immunity to which it is or may become entitled in respect of itself or its assets; from legal proceedings in relation to this Agreement; including; without limitation; immunity from suit; judgment or other order; from attachment; arrest or injunction prior to judgment; and from execution and enforcement against its assets to the extent not prohibited by mandatory law.

In the -also binding to the Borrower- Legal Opinion of the Greek Legal Council of State it is stipulated in reference to the waiver: “Neither the Borrower nor its assets are immune on the grounds of sovereignty or otherwise” while the exception for “mandatory law” present in the article of the Agreement is here omitted.

It is apparent that the hereinabove clause is overly general; in the sense that it could include any category of immunity; while its generality is expressis verbis stated in the terms “irrevocably and unconditionally” which excludes all possibility of reservations or exceptions. The exception of the waiver of all immunity in favor of “mandatory law” is obscure and undefined while its lucidity would be of paramount importance for the article’s application. The term “mandatory law” is not currently a recognized legal term in Greek law. If we were to interpret “mandatory law” as “public order” rules no waiver of immunity on the grounds of sovereignty

would stand to be valid– except perhaps the waiver of a number of procedural rights. Another interpretation of “mandatory law” could be to consider as such the principles and provisions of peremptory law (jus cogens); which also would result in the above waiver to be judged as invalid. The absence of reference of this exception in the aforementioned Legal Opinion; furthers the interpretational vagueness. In this Legal Opinion which is proclaimed by the two members of the Legal Council of State as “valid; legally binding and executable”; the generality of the waiver is even more intensely stipulated (“immunity on the grounds of sovereignty or otherwise”). The question remains; are we to consider the exception of “mandatory law” devoid of content? This makes the demand for an authentic interpretation all the more important.

The current width of the scope of application of the waiver of immunity is extremely perilous. The wording of art. 14 (5) leaves no doubt as to the fact that it does not concern the usual and insignificant procedural or jurisdictional immunities such as sovereign immunity.

Apart from these; the waiver definitely covers substantive rights and authorities of critical importance for the fundamental element to a state’s existence; its sovereignty. It would be logical and consistent with their capacity; for Greece’s lenders to maintain rights pertaining to the safeguarding and satisfaction of their claims the likes of which are maintained by any private lender of the state: namely the right to injunctions; seizing of state assets that have nothing to do with sovereignty or public order restrictions – as is the case in any given democratic state. Those assets provide a sufficient basis for the lenders’ gratification. It therefore becomes obvious that the purpose of such a term is of a purely political nature.

The waiver of immunity appears to be not only the Agreement’s more strict term; it is also an infringement on fundamental principles of law in every possible level: International; European Union and Greece’s domestic law alike. To my personal

knowledge; it is a newfound type of term in the history of world economies. By violating the fundamental principle of respect for state sovereignty it imperils sovereign rights and the existence of the state itself.

This peril appears imminent if examined combined with another term of the Loan Facility Agreement. The one that gives Greece’s lenders the right to transfer their rights arising from the participation to the Agreement; to a third party (state). This term is also inconsistent with the principle of the rule of law; the principle of contractual equality; and that of proportionality not only as excessive and abusive; but also as irrelevant to the Agreement; the purpose of which it was meant to serve. Finally; it is inconsistent with the principle of respect for the state as a social; political and legal entity and the principle of the rule of law due to its overly forceful character and excessive degree of burden to the Borrower (Greece). Specifically; concerning the compatibility of said waiver of immunity to the rules of peremptory international law (jus cogens) it has to be observed that such a term; imposed by Lender-States on a Borrower-State which at the time of negotiations for the Loan Agreement was in the middle of such a detrimental economic crisis as the one Greece was in; undoubtedly constitutes an exertion of political and economic violence and poses a direct threat to the state’s prominent element; its sovereignty. It therefore remains to be examined by experts in the field; whether the waiver of art. 14 (5) of the Agreement violates fundamental principles of international law and the Treaty of Vienna of 1969 in particular. Moreover; apart from the question of compatibility with international law provisions; the aforementioned waiver; imposed by EU member-states on another EU member-state; is not in compliance with the principles of the EU legal order and its legal culture.

b. The transfer of Greece’s lenders’ rights arising from the Loan Facility Agreement

Under art. 2 (3) along with art. 13 of the Loan Facility Agreement; one or more of the lender-states with the consent of all lender-states are able to assign or transfer to a third party any one of their rights and obligations arising from their participation to the Agreement. At the same time; Greece; being the Borrower; is not entitled neither to oppose to such a transfer or assignment nor to transfer part or the total of its rights and obligations in respect of the Agreement to a third party. In this way; the lenders are in a position to form a structure of relations with other lender-states and third parties; which will bear binding results for Greece without its consent. Taking into account the fact that no reciprocal term is provided for the Borrower; we find the said term in violation of the principle of equality of contracting parties.

c. The requirement of a Legal Opinion by the Legal Advisor to the State regarding the lawfulness of the Loan Facility Agreement.

Article 3 (4) (a) of the Agreement introduces a term that is derogatory to any governmental authority representing a state. That is the request for a “legal opinion satisfactory to the Lenders given by the Legal Advisor to the State at the Ministry of Justice; Transparency and Human Rights and the Legal Advisor to the State at the Ministry of Finance in the form set out in Annex 4.” Furthermore; Article 3 (5) (a) of the Agreement imposes an obligation to the Borrower (the Greek government in particular) prior to any further request for a subsequent loan; of providing

confirmation that no event has occurred that would render incorrect any statement made in the legal opinion. Finally; under article 4 (1) (b) of the Agreement “The Borrower represents and warrants to the Lenders on the date of this Agreement and on each Interest Payment Date that: the legal opinion (…) provided in accordance with Article 3(4)(a) is accurate

and correct.” (sic)

According to the “Form of Legal Opinion” attached to Annex 4 of the Agreement; the above Legal Advisors to the State ascertain that all components and terms of the Loan Agreements and the MoU (the genuineness of all signatures; the competence of state authorities to validly authorize and sign the Agreement; the binding status and enforceability of the MoU.); -bearing the meaning set out in the Agreement or the MoU- are fully in compliance with Greek law and thus valid; legally binding and enforceable.

Among others; the Legal opinion guarantees: (a) The Borrower’s execution; delivery and performance of the Agreement and the MoU: (i) (…) (ii) have not and will not violate any applicable regulation or ruling of any competent authority or any agreement or Treaty binding on it. (b) The Agreement and the MoU are in proper legal form under Hellenic laws for enforcement against the Borrower and the Borrower’s Agent. The enforcement of the Agreement would not be contrary to mandatory provisions of Hellenic law; to the ordre public of the Hellenic Republic; to international treaties or to generally accepted principles of international law binding on the Borrower. (c) It is not necessary in order to ensure the legality; validity or enforceability of the Agreement and the MoU that they be filed; recorded; or enrolled with any court or authority in the Hellenic Republic. (d) Neither the Borrower nor any of its property are immune on the grounds of sovereignty or otherwise from jurisdiction; attachment –

whether before or after judgment – or execution in respect of any action or proceeding relating to the Agreement.

This particular Legal Opinion constitutes an integral part of the Agreement with a legally binding status; it also constitutes an instrument invented ad hoc by Greece’s lenders to exert authority and a cynical one at that. I will proceed to explain why that is the case:

(a) It appears to be a rather odd kind of Agreement. Lender-states putting no trust in the signing of the treaty by the political representatives of the Hellenic state; namely the government in the scope of international and domestic law; request additionally a Legal Opinion by a hierarchically inferior to the government administrative institution in order to serve as a certification of the compliance of the Agreement to Hellenic law. However; neither this Legal Opinion appears trustworthy to the Lenders thus they demand a confirmation of its accuracy by the government (!). Moreover; not even the request for a Legal Opinion is considered sufficient; so the lenders design a Form of Legal Opinion which they attach to the Agreement making it its Annex 4. Following those provisions; the Hellenic government demands of its inferior advisory administrative organ the composition of a Legal Opinion true to Annex 4; certifying that the Agreement signed by the government is in compatibility with the Greek legal order.

The Legal Opinion is composed and signed and then again the government ascertains its genuineness and correctness. This final confirmation is the final act of a vicious circle.

To put it more simply: The Legal Advisor to the State through his legal opinion certifies the validity of Agreements signed by the government and in its turn the government ascertains the validity of the Advisors’ certification.

In its irrationality this type of term is in violation of the principle of the rule of law but other than that this vicious circle of opinion and certification is also ineffective and thus surpasses the boundaries of the principle of proportionality and the spirit of law; as in all contemporary legal orders the state is held accountable for the acts and omissions of its organs and advisors and not vice versa. One can’t help but wonder; to what end is this vicious circle of certifications and ascertainments between the government and its advisors?

(b) The term via which the Lenders impose on the Borrower-state to demand of one of its agencies; namely its Legal Advisors to certify based on principles of legal science and the rules for the entry into force of an international treaty; the validity and lawfulness of the Loan Agreements a validity and lawfulness already guaranteed by the government of the Greek sovereign state itself; is not only a violation of the Constitution but also an infringement on state sovereignty.

(c) The obligation of forming a Legal Opinion; its incorporation into the body of the Agreement as its essential component and at the same time a prerequisite to its conclusion is unlawful; for apart from the violations described above in (b); it exerts excessive pressure thus indirectly manipulating the scientific conscience of the Legal Advisors and their sense of duty as public functionaries.

In general; an a priori scientific/legal interpretation of a treaty by a third party; by definition concurring with the spirit of law and the freedom of science cannot be accepted as a valid term of the treaty.

Besides violating the freedom of science; such a term clearly renders any further interpretation and analysis of the Agreement’s terms redundant.

(d) The Legal Opinion is also unlawful for as a product of pressure and coercion numerous of its basic points have to be considered legally unfounded; on those points we will elaborate further on; it is also flagrantly incompatible with a series of fundamental principles of law and inaccurate on its ascertaining that the Agreement and the MoU has lawfully been ratified – if that is the actual certification made on the Form of Legal Opinion document.

(e) The Form of Legal Opinion imposed by the Lenders is -from the scope of international law and the rules of conduct in international relations- mainly though from the scope of principles and rules that govern relations between EU member-states; unlawful. It was not composed in accordance to the international legal provisions since it requests a certification of lawfulness of a number of blatantly unlawful terms and provisions of the Loan Agreements.

d. Lender’s rights in case of cancellation of Agreement terms.

Under article 6 (6)(a)-(b) of the Loan Facility Agreement; if the Court of Justice of the European Union or a constitutional court of a Lender or other court with competent jurisdiction in relation to such Lender decides that the Agreement violates European Union law or the constitution of the lender and such violation cannot be

remedied then the Agreement shall immediately and irrevocably be cancelled; in the first case as a whole and in the latter only as far as the Commitment of the relevant Lender is concerned.

Not only did the Lenders make sure that this double provision was set only to their benefit and not the that of the Borrower; violating the principle of equality but they also shielded themselves –by further violation of the above principle- from the event of the Borrower’s obligations being judged by any judicial authority (this obviously means the Borrower-state’s authorities) not legally binding or not enforceable against him; or even unlawful.

Therefore; in such a case where the Agreement was to be found not binding or enforceable by a Greek competent court; the Lenders; according to article 8 (1) (c); may cancel the Loan Facility Agreement and/or declare the outstanding principal amount of the Loans to be immediately due and payable; together with accrued interest.

Finally; the Lenders; not quite satisfied by the above term safeguarding their own interests in case of cancellation; also imposed the provision of article 11 (1) of the Agreement: “If any one or more of the provisions contained in this Agreement should be or become fully or in part invalid; illegal or unenforceable in any respect under any applicable law; the validity; legality and enforceability of the remaining provisions contained in this Agreement shall not in any way be affected or impaired thereby. Provisions which are fully or in part invalid; illegal or unenforceable shall be interpreted and thus implemented according to the spirit and purpose of this Agreement.”

By this term the Lenders set to safeguard their interests in case of intervention by an international or Hellenic authority of a Hellenic court mainly in the stage of execution.

We have the following observations to make concerning this system of provisions imposed on Greece by its more powerful

counterpart in the Loan Facility Agreement (the Lender-states) aimed at the protection of their own interests:

(a) The Lenders; being in full conscience of the incompatibility of the Loan Facility Agreement to the international law; the EU law and their own national Constitutional provisions made every effort to ensure the safeguarding of their individual interests against those of the Borrower and to minimize any negative impacts in any event of cancellation of Agreement provisions. The terms incorporating this effort on the side of the Lenders are undoubtedly incompatible to the fundamental principles of law and manifest intentions of underhanded sophistry and pettifoggery.

Most significantly; the hereinabove terms expressly violate the principle of contractual equality; for they were not extended to also benefit the Borrower.

(b) The basic rule regulating the results of any contract being ruled unenforceable; commands the restitution of any amount of unjust enrichment on behalf of the contracting parties.

The above rule is enforced by the principle of bona fides and contractual ethics as well as the principle of equality of the contracting parties not responsible or mutually accountable for the invalidity of the contract.

On the contrary; under the Loan Facility Agreement’s terms; if ever a cancellation of the Agreement was to be accepted; the obligation of the Borrower for the payment of his debt to its mighty Lenders remains fully effective. The Lenders have every right to request an early repayment of the Loan [except in the case of article 6 (6) (a)-(b)].

Taking into account the obvious imbalance between the contracting parties’ negotiating powers; rendering the Lenders fully potent of imposing any kind of term unilaterally; then the

abusive nature of the terms and their incompatibility with principle of equality and the rule of law is self-evident.

(c) The inconsistency of the above terms with the principle of the rule of law currently guaranteed by international; European and constitutional law alike is unmistakable because those terms were set in the effort to place the Agreement high and above the law and the judicial control of its lawfulness since the results they prescribe to the invalidity of the Agreement deviate from the ones set out in the law and the judicial protection of the Borrower.

e. Violations of the Greek Constitution.

The above violations of fundamental principles; rights and guarantees entrenched in superior law; also constitute violations of the Greek Constitution; either directly or indirectly through the violations of international and European law guarantees that form an essential part of domestic law.

This results in the Parliament not being able to ratify the Loan Agreements according to constitutional provisions; moreover due to the rule of in globo ratification of international treaties; the Parliament lacks the authority to selectively ratify the terms compatible with the Constitution.

To what specifically concerns the waiver of immunity; the ratification of the Agreement is made impossible because not even the representatives of the Greek state are vested with such an authority.

4. Memorandum of Understanding policies incompatible with the level of guaranteed protection of fundamental rights

a. The common frame of guarantees in superior law.

In a series of MoU provisions set to clarify the terms of the Agreement; the Loan Agreements request the enactment of certain economic policies which infringe upon rights entrenched by the Greek Constitution as well as the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR Convention) and the Charter of Fundamental Rights of the European Union. According to article 6 par. 2 of the Treaty of the European Union (TEU) the Charter “shall have the same legal value as the Treaties.” While paragraph 2 of the above article states that the European Union “shall accede” to the ECHR Convention. Moreover; paragraph 3 submits that fundamental rights “as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States; shall constitute general principles of the Union’s law.” Apart from the above provisions article 52 of the Charter of Fundamental Rights of the EU bearing the title “Scope and interpretation of rights and principles” adds to the legal framework of fundamental rights’ protection.

According to the aforementioned provisions; the guarantees reflected in the ECHR and the ECHR Court jurisprudence as well as in the Charter and the attached “General provisions governing the interpretation and application of the Charter” have are legally binding on Greek Courts.

It is evident that through the above provisions the EU is imposing an extended and uniform protection of fundamental rights; as it has been established through the European Convention of Human Rights and the ECHR Court jurisprudence; the Charter of Fundamental Rights and the official interpretation of the “General Provisions”. Either way; a uniform and undifferentiated approach to human rights protection -as defined in the ECHR- has already been in effect –though in a looser sense- among the Council of Europe contracting states through the jurisprudence of the Strasbourg Court.

The level of uniform protection of fundamental rights maintained in the EU today; is founded on the uniform EU legal order and is strictly imposed on member-states with no room for digressions in its application unless it is purported to provide a greater level of rights’ protection.

b. MoU provisions found incompatible with the level of guaranteed protection of fundamental rights.

Both the Loan Facility Agreement and the Memorandum of Understanding; while having been concluded among Euro area member-states -the euro-area being the core of the EU establishment and the European legal order itself- they are found to contain terms and provisions not in compliance with a wide range of fundamental rights guaranteed by the EU and the constitutions of member-states alike as well as the Council of Europe which comprehends the whole extent of European legal culture.

In particular the terms and provisions of the MoU that are meant to elucidate obligations of the Hellenic Republic arising from the

Loan Facility Agreement; are found in direct violation of the aforementioned guarantees of fundamental rights’ protection; namely provisions requesting the adoption of policies reducing and cutting wages; bonuses; allowances; pensions; unemployment allowances; and implementing a nominal freeze in the indexation of wages and pensions –whose future increase had been guarantees by Greek law prior to the Loan Agreements- such as the ones in Tables 1 and 3 of the Memorandum of Economic and Financial Policies and articles 1 (i); 2 (i) and (ii); 6 (i) etc. of the Memorandum of Understanding on Specific Economic Policy Conditionality.

The question arises; whether the MoU provisions exemplifying policies found incompatible to the fundamental rights protective provisions actually infringe upon entrenched individual rights; given the fact that in order to accept the existence of a violation two conditions have to be met: first of all; an executing statute and secondly an administrative act realizing the violation. According to the ECHR Court decision in the case: Holy Monasteries v. Greece of 9th December 1994; even the sole entry into forceof a law whose content is in violation of superior law ensuring the protection of rights; constitutes in itself a violation of said rights.

Thus; with no regard to the legislation and administrative acts of the Hellenic Republic; the existence in effect of the MoU as an international treaty establishes an infringement upon fundamental rights.

It is evident that policies prescribed by the MoU provisions may –apart from the aforementioned cuts and reductions in income;

entail further violation of economic rights which requires a further specified critical inspection.

Furthermore; it has to be noted that apart from rights already infringed upon that make up the scope of the present essay; the MoU provisions provide grounds for a further and wider violation of other rights also guaranteed by the EU legislation and the Greek Constitution. It is further observed that those economic rights subject to the present analysis belong to the a circle of social rights in the broader sense; which is comprised of the right to pay of employees in the public and private sector as well as beneficiaries of the public social security system. Those rights are under the protection of different levels of superior law which form the net of guarantees traced below:

i. Protection of property.

Protection of property is well known to have been the institutional foundation of the economic system of today’s civil state. Due to the social sensitivity of democratic European legal orders together with the evolution of welfare state; the protection of property has for decades been extended to also include the economic labor rights and the employees’ social rights. This expansion covers a series of individual property rights among which are the right to wage; pension; bonuses and allowances and every other kind of earnings of employees or social welfare beneficiaries or beneficiaries of any kind or periodic provision payed in installments or as a lump-sum. As long as they are prescribed by law or determinable by law or constitute an objectively legitimate expectation that could be based on the law in effect up to the time of the violation.

In other terms; they are rights of an economic nature that can be claimed on legal grounds. They are founded on the law currently in effect and thus are or are considered to be acquired even if their exact value has not been yet assessed and cashed.

The ECHR Court’s established case-law that went along the lines of the status-quo in various European legal orders; integrates the above mentioned set of rights to the right to property guaranteed in article 1 of Protocol No 1 to the ECHR. Further protection is currently provided by art. 17 of the Charter of Fundamental Rights of the EU along with the “Explanation on Article 17 — Right to property” of the attached document “Explanations relating to the Charter of Fundamental Rights of the EU” and finally article 17 par. 1 and 2 of the Greek Constitution interpreted in the light of the ECHR Court’s case-law. The guarantee of the right to property is not only a guarantee to an individual right but is also a “fundamental right common to all national constitutions. It has been recognized on numerous occasions by the case-law of the Court of Justice”

The hereby official «Explanation» for the established fundamental principle of protection of property is relegates to the “Hauer judgment” of the ECHR Court (13 December 1979); adding moreover that the wording may have been updated but -in accordance with Article 52(3)- the meaning and scope of the right are the same as those of the right guaranteed by the ECHR and the limitations may not exceed those provided for there.

Particular emphasis has to be assigned; as far as the infringement upon the property rights of the employees and pensioners is concerned; to the fact that the guarantees and interpretation of those particular rights founded in article 1 of Protocol No. 1 to the ECHR; article 17 of the Charter of Fundamental Rights of the EU; the ECHR Court’s jurisprudence and the “Explanation on Article 17

— Right to property”; form a framework of provisions binding on the Greek Courts.

Some of the most significant individual property and economic rights encompassed under the provision of the above guarantees and violated under the terms of the Loan Agreements; are: the right of employees in the public sector through a public or a private law contract as well as private sector employees to pay; as long as it’ s established by law its type is determined and its amount calculated by law or a regulation administrative act based on legislative delegation or in collective labor agreements or private law contracts. (wages; allowances; Christmas and Easter bonuses; the 13th and 14th wage; programmed increases.) as well as any kind of monthly; yearly or lump-sum social security benefits (pensions; allowances; the 13th and 14th pension; lump-sum main or auxiliary pension).

Also included are certain rights that have not been expressly determined but whose determination can easily be carried out according to certain law provisions. Such rights are: Increases in pay prescribed by law; or by bilateral agreements or collective labor agreements which can be calculated based on future information; rights to reimbursement in the event of termination of employment or a labor accident etc.

All the above mentioned economic rights are separately and independently based on law and entail essentially independent claims; each one founded on a specific ratio legis and can thus be considered legally independent property rights. They are entrenched and protected independently and not as parts of a more general protection of a right to individual property.

The partial or total deprivation of any independent right can only be lawfully achieved through the terms of expropriation.

Therefore; the partial or total deprivation of any of the above mentioned economic; property and social security rights that was conducted albeit not by means of expropriation –due to their

pecuniary nature even an expropriation could not have been conducted- is in violation of article 17 of the Charter of Fundamental Rights of the EU; that provides for a lawful deprivation of property only for the purpose of public benefit but always “when and as specified by statute and always following full indemnification”.

According to the provision of article 17 par. 2 of the Greek Constitution; apart from the lawful formalities of the conduct of an expropriation; a full; prior compensation is demanded by the Constitution. This last prerequisite naturally cannot be met when it comes to the deprivation of property rights of a pecuniary nature.

Therefore; any partial or total deprivation of those particular rights is unconstitutional to begin with; and moreover lays the grounds for the civil liability of the state and the competent public law legal persons; based on articles 105 and 106 of the introductory law to the Greek Civil Code.

The compensation demanded by article 17 par. 2 is full and objectively calculated; incorporating any actual loss and forgone gain; not only based on the above provisions of the introductory law to the Civil Code but also on article 17 par. 2 as compensation for a quasi-expropriation.

In the event that the total or partial cuts in wages and pensions were to be considered “a deprivation of property in the public interest”; the mere meaning of property and its protection would undergo a dramatic modification. Up till now the system of property protection and guarantees extends to property as an institution (an objective guarantee) and to the guarantee of each and every individual and independently entrenched property right. By “individual and independently entrenched property

right” we mean the claim of any particular individual to one or numerous divisible or non-divisible property rights.

The term “property rights” translates into any right to ownership; use; exploitation; or selling of any proprietary object. A proprietary object is any commodity of an economic value; any right; demand or legitimate interest.

Any partial or total deprivation of such a proprietary right constitutes a deprivation of property which can only be concluded lawfully through the procedure and conditions of expropriation.

Public interest can be the basis of lawful restrictions to property rights; such restrictions though are distinct from the concept of deprivation of property; which is translated into the removal; diminution or decrease of an independent proprietary object.

The term deprivation is used in the provision of article 1 of Protocol No.1 of the ECHR; article 17 par. 1 of the Charter of Fundamental Human Rights of the EU and article 17 par. 2 of the Greek Constitution.

A restriction however; refers to the enjoyment of the proprietary object and for this reason restrictions are described in all three hereinabove mentioned articles as restrictions to the enjoyment of the possession or the exercise of proprietary rights.

The terminological difference between deprivation and restriction is well-defined. Examples of restrictions to proprietary rights of a pecuniary nature could be: temporary freezing of bank deposits; a decrease in currency exchange value; currency exchange restrictions; currency undervaluation etc.

A divestment; though or a quantitative reduction of pecuniary claims in favor of the public interest cannot be considered a restriction.

The question arises on whether the reduction or the abolishment of legally prescribed benefits to public sector employees and pensioners that has already been imposed by the Loan Agreements could be categorized as public charges (taxes or contributions) stipulated in article 1 of Protocol No. 1 of the ECHR and article 4 par. 5 of the Greek Constitution.

A negative response to that question is spontaneous; and the reason is twofold: First of all; a public charge imposed on an object of ownership for public interest reasons is comprised of only a small percentage of the total value of the object in question; the charge being able to rise to a higher level only in proportion to the value of the possession; otherwise it is received as a violation of the right to property. Secondly; the imposed public charge is subject to the two conditions expressly set out in article 4 par. 5 of the Constitution which are in force –without the need for an expressis verbis specification- in every legal order in Europe: The condition of an imposition of charges based on the principle of equality (prohibition of discrimination) and the condition of proportionality (principle of proportionality).

The hereinabove policies of cuts and reductions in wages; bonuses; allowances and pensions; were enforced in an undoubtedly discriminative fashion only to public sector employees and pensioners; who belong in one of the most economically vulnerable groups of the Greek society. Any differences in the reductions imposed; are unfounded and in full contempt of the principle of proportionality that should have been the instrument that would lawfully match the income level to the level of reduction imposed; given the fact that there was no rational method to calculate the proper income reduction for each income category; such as the tiered tax system or any other appropriate method.

What is more; the extra taxation imposed on certain businesses and sizeable real estate was not a product of the use of the principle of proportionality between the public charge and the

economic potency of the tax-payer either; given its amount and the fact that it was a lump-sum; fixed tax.

On the contrary; it seems rather obvious that the rationale behind wage and pension cuts was one of an effortless accumulation of funds.

The thought of considering the total amount of assets as the basis for the computation of charges and contributions appears absurd; apart from the fact that it would be irrational and in violation of a series of law provisions; it would also result in the broadening of the scope of the principle of proportionality; the application of which would lead the way for an imponderable level of burden for the owners of large property.

We also have to emphasize the fact that the principle of proportionality in the imposition of public charges (art. 4 par. 5 and art. 25 par. 1 of the Greek Constitution) -applicable to any restriction to an entrenched right- is not just a political principle but also a legal one; and its application is subject to judicial control.

ii. Protection based on the fundamental principles of the rule of law; the certainty of law and the principle of legitimate expectations.

The violation of fundamental principles brought on by the abolishment of entrenched rights of the employees and pensioners is so intense that its mere reference without any further analysis would suffice. When a state infringes partly or fully upon the enjoyment of the rights of certain individuals and categories of individuals -rights founded on the current legislation – it is obviously in violation of the principle of the rule of law. It also

goes without saying that the partial or total deprivation of the enjoyment of lawfully acquired rights constitutes a radical overturn of the certainty and security of the status of protection provided by the legislation at any given time.

Particularly when the rights in question are social rights; as in our case; the welfare state system combined with the principle of the rule of law (article 25 par.1); is rendered devoid of meaning.

As mentioned hereinabove the partial or total deprivation cannot stand to be confused with restrictions aimed at achieving a level of social function of rights; as those restrictions do not constitute an abolition but a mere restriction to the extent of enjoyment of any given right.

Neither does the imposition of social function restrictions; or of solidarity-based restrictions begin with the most economically vulnerable parts of society; particularly when it come to restrictions of a permanent nature.

Let us linger a little bit on the fundamental principle of respect for legitimate expectations; which is at the very core of the principle of the rule of law. The development of this particular principle has been of tremendous significance to the relations between society and the state while the Court of Justice of the EU has assigned to it a great importance in its case-law particularly the decisions concerned with economic policies. Moreover it has been accepted as a principle deriving from the Greek Constitution and the jurisprudence of the Council of State in particular. Its contribution is greater in the field of economic relations between the individual and the state; mainly that of property rights.

Acquired property rights; and even de facto formulated property status-quo; are the main scope of protection of the said principle.

It is obvious beyond the shadow of a doubt that the most significant case of violation of the principle of legitimate expectation is that of the overturn of legally entrenched rights’ protection. That is the case in the jurisprudence of the Council of State to this moment.

Coming back to our case of the deprivation of employers from legally awarded rights we cannot but confirm a total disregard for the individuals’ legitimate expectations of the Greek legislative body.

As noted earlier; the principle of legitimate expectations –as well as property rights – does not extend only to cases of rights already directly determined by law; but also to those expectations that individuals form based on a consolidated state conduct; based on the repetition of which; individuals make arrangements of their personal and family lives.

iii. Protection of social rights and welfare state.

Composing the Loan Agreements; Greece’s lenders -aiming to ensure the accumulation of funds for the servicing of the Loans- of all the property rights that fall into the scope of protection of property guarantees and the principle of legitimate expectations; chose to target the rights of employees and pensioners; which would serve their purpose more quickly and efficiently.

This choice of policy is in direct contrast to the rationale of law and the welfare state system and renders the non-conformity of the relevant policies to the system of protection of social rights in either the EU law and the Greek Constitution all the more apparent.

Apart from the social discrimination inherent in the choice of solely public sector employees and pensioners to shoulder the

burden; the abolition of many bonuses and allowances disrupts the balance of equality between employees and pensioners; given that most of those allowances and bonuses had been introduced in exactly the effort of bridging the economic gap between those two categories.

Other bonuses; such as the Christmas and Easter bonus as well as the leave bonus; were also set to attain the same goal of social equality for the above categories of citizens as they provided a much needed financial support through certain times a year dedicated to mental repose and family life.

The indispensability of the above bonuses and allowances for social equality and justice as well as for the maintaining of human dignity of Greek employees and pensioners; apart from their objective necessity; is further manifested by both the current recession in the Greek market of standard commodities; as well as the comparison between their earnings and the corresponding earnings of professionals and pensioners in the rest of the EU member-states.

We come to the conclusion that the violation imposed upon social rights by either the reduction or the abolition of provisions; can be thwarted by the upholding of legal guarantees for labor and social security rights.

As far as the guarantees of EU law are concerned; despite their lack of intensity in the field of social rights’ protection; they provide sufficient grounds for us to reach a confirmation of their incompatibility with policies infringing upon employment and pension rights of Greek citizens.

For further endorsement of our arguments on the non-conformity of the above policies to EU law; we must make a reference to

articles 2 of the TEU and 21 of the TFEU; 1; 24-26 and 27-34 of the Charter of Fundamental Rights of the EU along with the corresponding “explanations” of the document attached to the Charter entitled “Explanations relating to the charter of fundamental rights”; we must also take into account the European Social Charter and the Community Charter of the Fundamental Social Rights of Workers. The hereinabove policies are also not in conformity with the provisions of the Greek Constitution concerning the guarantees of a welfare state; the social rights of employees as well as the right to social security. The violated constitutional provisions are found in articles 25 par. 1; 21 and 22.

5. Law 3845/2010 – The first implementation of MoU policies.

Law 3845/2010 constitutes the first implementation of the policies prescribed in the Memorandum of Understanding and basically the first law in execution of Greece’s Loan Agreements. So a need of analysis of the above law arises. Some issues have to be clarified: under which category does legal theory classify a statute such a 3845/2010? What type of provisions does it entail and what was the legal basis of its implementation? The answers to these questions; on the one hand will ascertain whether all necessary constitutional conditions for the passing of legislation have been met and assess its compatibility to superior law on the other hand will render interpretation of its application clearer.

The first conclusion of this analysis is that law 3845/2010 is a sui generis legal document.

Let us proceed in a more in-depth analysis:

a. A statute in execution of international treaties prior to their ratification.

The statute in question was voted in the standard parliamentary legislative procedure and thus gives the impression -externally- of being an impeccable one. However; in the assessment of a law’s compatibility to the constitution further issues come forward to be evaluated. For example we have to ascertain that essential prerequisites to the exercise of legislative power set forward by the Constitution are met; as well as the fact that fundamental rules and principles of parliamentary republic that regulate the legislative procedure are being respected and the appropriate procedure requested for each individual type of legislation is dully followed.

Naturally; the issue in this case is whether the violation of any procedural rule in the course of the formation and voting of legislation is an can be subject to judicial review; bearing in mind articles 93 par. 4 and 100 par. 1 (e) that limit the assessment of a statute’s constitutionality solely to its content and not the constitutionality of the process of its entry into force.

It is self-evident that courts should be capable of evaluating; beside the constitutionality of a statute’s content; also the compliance of the legislative body with certain constitutional provisions that are quintessential to the statute’s status as a valid product of the exertion of legislative power.

Altering the wording of art. 93 par. 4 of the Greek Constitution; one could re-establish it as follows: “The courts shall be bound not to apply a statute whose procedure for entry into force was not in compliance with any essential procedural prerequisite.” Such examples are: bypassing an obligatory stage of the parliamentary legislative process (ex. A statute not debated and voted on “by article”) or the absence of the necessary signature by the capable authority (ex. The minister in charge.); or of the necessary

promulgation and/or signing by the President of the Republic; the absence of publication in the Government Gazette or the lack of a solid legal basis for the statute’s entry into force such as the launch of a legislative process for the voting of a statute executive of an international treaty not ratified at the time or even the insufficient degree of information passed on to the legislative body for the purposes of debate and voting on the passing of a certain statute etc.

It is self-evident that such deficiencies would render a statute invalid; because they are proved to be either in violation or just not in the direction of ensuring the principle of popular sovereignty during the legislative process; via the means provided for by the Constitution itself. And it is also obvious that such violations of basic Constitutional terms and prerequisites to the exercise of legislative power also pertain to any stature’s content -an effect that the term “invalid” given earlier; aims to portray. It would therefore be inconsistent with the rationale of our legal order and the mission set forth for the judicial branch of power which is found at the core of the “rule of law” principle; to exclude such fundamental and quintessential prerequisites to law-formation from judicial control altogether.

As far as statute 3845/2010 is concerned; we note that it was put to debate; voted on and published through standard parliamentary procedure while it is defined; in its title even; as a statute aimed to executing the provisions of an international treaty; and while the numbering of its articles are written in full as is typical in statutes sanctioning international treaties. Furthermore; it was accompanied by annexes containing international political documents composed by EU member-states (Annexes I and II) and the Hellenic Republic itself (Annexes II and IV); which form an essential part of any statute ratifying an international treaty.

In particular; Annexes I and II established the European Financial Stability Mechanism while in Annexes III and IV the program of application of the Stability Mechanism was outlined. Those same documents; two days later were also included in the Memorandum of Understanding as “Memorandum of Economic and Financial Policies” and Memorandum of Understanding on Specific Economic Policy Conditionality; thus the question of determining the legal nature of those political documents located in the four Annexes -given that they neither constitute parts of an international treaty nor do they incorporate legal provisions for they were never introduced as Bills- debated or voted on by the Hellenic Parliament.

Those presumptions lead us to assume that statute 3845/2010 was not voted in ratification of an international treaty. As for the “policies” specifically prescribed in it; as well as those whose determination and introduction is entrusted upon the President of the Republic and the administrative organs; they are referred to in the hereby statute as “Policies directed to the application of the support mechanism of the Greek economy by the Euro zone member-states and the International Monetary Fund.” As we noted earlier; such an international treaty had not been yet concluded at the time; but was actually concluded a few days later. This type of machination demonstrates the fact that the hereinabove statute was not actually a product of the exercise of parliamentary legislative power albeit the executive one. It constitutes a governmental initiative; coerced by Greece’s future Lender-states that took the form of a legislative document in order to acquire a more substantive; trustworthy status. The parliamentary body of representatives was misinformed about the legal grounds for the entry into force of the statute in question and subsequently mislead; as was the final recipient of the statute’s policies; the Greek people.

The above arguments prove beyond the shadow of a doubt that statute 3845/2010 neither was nor could not have been a statute

ratifying an international treaty; but according to its content it is basically an “a priori” ratifying statute of international treaties not concluded at the time of its enactment; all the while it is still applied as an executional statute to these treaties. In the analysis that follows hereinafter; we will demonstrate why the statute in question is ultimately a false-executional statute.

b. The violation of the constitutionally prescribed sequence of: conclusion-ratification-application and its implications.

According to the democratic principle and the principle of representative democracy established by the Constitution; the EU Treaties; the ECHR and international law in general as well as according to articles 28 par. 2; 36; and 1 par. 1 of the Greek Constitution regulating the functioning of the representation system; the parliamentary system and the function of the Parliament itself; as well as according to established practice of parliamentary republics all over Europe; the obligatory order of procedure for the entry into force of the international treaties; statute 3845/2010 and any other relevant statute or administrative act is the following: (a.) Conclusion of an international treaty and ratification requested by article 36 par. 2 of the Constitution (b.) Promulgation by the Plenum by a majority of three-fifths of the total number of representatives according to article 28 par. 2 of the Constitution (which could in itself include ratification – art.36 par. 2 ) (c) Introduction of the necessary national law provisions for the execution of the international treaties (statutes and administrative acts) and finally (d) publication of the necessary individual administrative acts for the execution of the national legislation.

The exemption of the compliance to this procedural order from judicial control is a flagrant disregard for the Constitution and the principle of popular sovereignty; as we will proceed to explain.

In my personal view; there had been one more procedural stage -dictated by the parliamentary principle- that should have

preceded all the aforementioned procedural steps; and that is the previous briefing of the parliament about such an issue of particular governmental importance.

Constitutional theory and practice in parliamentary democracies around Europe supports that it is the government’s obligation stemming from the principle of parliamentary democraciy to provide information to the body of Representatives and to request its approval on matters of significance for state interests before the adoption of measures in the executive branch’s competence. This is undoubtedly a view in compliance to our principles of our legal order. In the present case; the extreme significance that the terms and provisions of intense severity of the aforementioned international treaties for the interests and the existence of the State itself; cannot be denied. Therefore; the government was under the obligation of asking for the Parliament’s approval of the adoption of measures of such paramount importance and austerity.

c. Overriding of the authority of the Hellenic Parliament.

The procedure for the ratification and the entry into force of an international agreement described above; constitutes the basis of lawfulness of the Agreements and it is the prerequisite for their acquiring of legal validity and enforceability. That is because those procedural prerequisites prescribed by the Greek Constitution are not mere legal formalities albeit they define the means of exercising of popular sovereignty and safeguard the democratic legitimacy of procedures; dictated in article 1 par. 3 of the Greek Constitution: “All powers derive from the People and exist for the People and the Nation; they shall be exercised as specified by the Constitution.”

In our particular case; the Hellenic parliament; the body of representatives of the people; the legislative body: the one with the authority of holding the government accountable; has not to this day been informed -according to the constitutionally prescribed process- of the content of the government’s negotiations leading up to the Loan Agreement; not even of the terms and conditions binding Greece to the conclusion of said agreements; neither prior or after the introduction of policies in execution of the Agreements.

Most importantly there was no parliamentary debate held concerning the Loan Agreements –nor could one have been held; since no prior knowledge of the content of the Agreements had been passed on to the representatives of the people. Nor did the Greek people receive any such information; even though the principle of popular sovereignty dictates otherwise. Characteristically; to this day the vast majority of the people are in utter ignorance of the content and terms of the Loan Agreements.

The lack of sufficient information on behalf of the Hellenic Parliament; leads us to the conclusion that as far as the voting of statute 3845/2010 is concerned; the legislative power was exercised without its most essential condition: the existence of a realistic basis of legislative regulation.

The legislative power cannot be exercised based on hypothetic future rights and obligations; nor can it regulate the fulfillment of obligations of the state and its citizens; of which the Parliament was ignorant. No individual or legal person; a fortiori the state; can undertake obligations of which it is not if full; factual knowledge.

The existence of a realistic basis is the foundation of any legislative act; and a prerequisite to the exercise of any regulating authority. In a democratic state; this is also dictated by the democratic

principle as a quintessential element in the exercise of popular sovereignty via the legislative body of representatives.

In the present case; the Hellenic parliament; entrusted with the exercising of the legislative power; enacted policies of extreme austerity and vested organs of the executive power with the authority of enacting further such policies in execution of terms of international treaties which the Parliament was not –and could not have been since they were not yet concluded- in cognizance of.

The effort made by the hereinabove mentioned amendment of statute 3845/2010; to cover this inconsistency by the “briefing and discussion” of the Parliament; was not only unconstitutional but also ineffective.

All of the above suffice to render statute 3845/2010 unconstitutional and thus invalid.

d. Statute 3845/2010 as an unconstitutional framework law.

Statute 3845/2010; bears the distinctive characteristics of a framework law; under article 43 par. 3 of the Greek Constitution; mainly due to the fact that certain ones of its provisions set a broad framework of regulation while the relevant delegations are widely based on legislative authority. All the while; we cannot proceed to treat statute 3845/2010 as a framework law as it was not introduced to the Parliament under articles 43 par. 4 or/and article 78 par. 5 of the Greek Constitution as is required for any framework law. Moreover; this particular statute could not have been introduced as a framework law; first of all because some of its provisions due to their nature belong to the competence of the plenary session of the Hellenic Parliament (art. 72 par.1) and therefore could not have been the object of delegation via framework law. (art. 43 par. 5); secondly; because some of the

policies are in reality taxation policies that under article 78 par. 4 of the Constitution also cannot be the object of legislative delegation. Furthermore; the rest of provisions do not constitute “general principles and directives” or a uniform “broad framework” addressed to the President of the Republic; as is dictated by article 43 par. 4 of the Constitution for the enactment of framework laws. Lastly; the nature of a framework law prescribes that the legislative delegations it contains; may only vest authority to the President of the Republic to specify the provisions of the framework law by the issuance of general regulatory decrees; which is not the case in statute 3845/2010 whose provisions provide delegation also to various administrative organs.

As far as the delegations to administrative organs are concerned; the ones provided by statute 3845/2010 are also found not in compliance with the Constitution; mainly because article 43 par. 2 of the Constitution allows for a delegation to be provided in cases concerning the regulation of more specific matters or matters of local interest or of a technical and detailed nature; this condition is not met in our case.

(e) The introduction of the Loan Agreements to the Hellenic Parliament and their lack of ratification as violations of the Constitution.

Any international treaty acquires a legally binding status in the field of a state’s international relations even before its ratification albeit until it is sanctioned by law -under article 28 of the Greek Constitution- it does not become an integral part of domestic law and thus cannot become a factor in the exercising of governmental powers (particularly the legislative power).

The currently enacted policies of utmost severity; and the monitoring of state function by international agents; are all based

on the Loan Agreement; international agreements not sanctioned by law of the Hellenic Parliament; while they enter into for as of their signing (statute 3847/2010 mentioned hereinabove).

However; the legal provisions and the regulatory or individual administrative acts in enactment of the policies designed in the said Loan Agreements; are parts of domestic law the compliance of which to the Constitution is judged based on Greek law. Furthermore; the monitoring of the compliance of Greece to the Loan Agreements; carried out by institutions prescribed by the said Agreements does not stand on legal grounds and is thus found unlawful and unconstitutional.

Most significantly though; the introduction to the Greek Parliament of the Loan Agreements; while their entry into force had already been enacted through the provisions of statute 3845/2010 even prior to their conclusion; or even afterwards by means of other legislative acts; and their application had already been initiated; is in severe violation of the Constitution and a major constitutional digression.

In conclusion; statute 3845/2010; whether we would identify it as a standard law; or a statute in execution of an international treaty; or even a framework law; is found invalid and in direct incompatibility with the Constitution; while also being in violation of the fundamental principles of representative and parliamentary democracy; which are also guaranteed by the law of the European Union.

We note that were the statute 3845/2010 to be considered a standard law; the provisions enacting policies of wage and pension reductions are incompatible with the Constitution (art. 17 par. 1 in combined interpretation with article 1 of Protocol No. 1 of the ECHR) and in direct violation of article 1 of Protocol No. 1 of the ECHR and the guarantee of welfare state provisions; the principle of legitimate expectations; and that of social rights; according to the above analysis on the relevant MoU provisions.

Therefore; all regulatory and individual administrative acts issued under the present statute; are to be considered invalid. Moreover; I would like to remark that; were the above issues of unconstitutionality to be considered beyond the range of judicial review; would result in the prolongation the violation and continued undermining of the constitutional and democratic legal order; with unpredictable consequences.

As for the protection of the right of Greek citizens against the whirlwind of the Loan Agreements’ provisions –particularly those of the MoU- it is now left in the judicial decisions of Hellenic courts; as well as those of the European Union and the Council of Europe. It is particularly encouraging for the European legal order; that judicial decisions in the EU member states of Romania and Latvia; confirmed there is still a sense of justice in Europe.

6. General Overview of the Loan Agreements from the scope of European Union law and the principles set out by the Council of Europe.

The loan agreements -as mentioned earlier- form a net of international treaties; two of which; namely the Loan Facility Agreement and the Memorandum of Understanding were concluded between the Hellenic Republic and fifteen EU member-states and members of the Eurozone. The third one is a treaty between the Hellenic Republic and the International Monetary Fund. The following factors determined the sui generis nature of the aforementioned Loan Agreements: a. They are bilateral; the

first one between the Hellenic Republic and the European Union as an political entity; at the same time between the Hellenic Republic and the IMF and also between the Hellenic Republic and each member-state separately. b. they assign both separate rights and obligations for each lender-state as well as collective rights to the group of lender-states. b. An Intercreditor Agreement accompanies the Loan Facility Agreement as an essential part of it; concluded among all Eurozone member-states other than Greece via which Loan Facility Agreement issues are regulated without Greece’s participation in the process; and the European Commission is entrusted with their representation in matters of organization and administration of the Pooled Bilateral Loans. d. The Memorandum of Understanding is signed by a representative of the European Commission; on behalf of the fifteen Eurozone lender-states. e. The lenders entrust duties related to representation; administration and surveillance of the Agreement’s execution to EU institutions (European Commission; European Central Bank) and those of the IMF agencies. f. There’s a single mention to the application of articles of the Treaties of the EU; namely that of articles 129 (9) and 136 (1) TFEU. g. The Agreements state that the Loan Facility Agreement and any non-contractual obligations connected to its application shall be construed in accordance with English Law (the law of a state outside the Eurozone). h. An exclusive jurisdiction of the Court of Justice of the European Union is settled; concerning any dispute arising from issued of validity; entry into force; interpretation and execution of the Agreement.

The elaborate nature of the contractual relations formed between parties as well as that of the provisions and terms of the loan agreements; demonstrated later on in the essay; to main

issues arise: First of all; whether EU member-states had the legal competence based on EU law to conclude such agreements between themselves and whether the role taken on by EU organs such as the European Commission and the ECB is compatible with their purpose in the EU law environment and the capacities granted to them by EU law; secondly whether the content of said Agreements is in compliance with EU principles and EU legal order.

On these two core questions; we proceed to make the following assumptions:

a. As far as the first issue is concerned; it is obvious that none of the Loan Agreements neither in their Preamble nor in any part of them makes a reference to any provision of the Treaties of the EU as legal grounds for its conclusion; nor is such a legal basis given anywhere in the documents of the EU Treaties. As noted earlier; the only such reference to provisions of the EU Treaties is made in paragraph 6 of the Preamble to the Intercreditor Agreement; where it is firmly stated that parties to said Agreement take into consideration that Measures concerning the coordination and surveillance of the budgetary discipline of Greece and setting out economic policy guidelines for Greece will be defined in a Council decision on the basis of Article 126(9) and 136 of the Treaty on the Functioning of the European Union (the “TFEU”). Surely; the above mentioned reference does not provide the Loan Agreements with any type of legal basis; and thus from a European law point of view their validity appears unfounded. The intervention of the IMF in the funding of the Loans to Greece (paragraph 3 of the Preamble to the Intercreditor Agreement) bears further inconsistencies with EU law as well as the subjection of the Agreement to the English law; in conjunction with the exclusive jurisdiction of the Court of Justice of the European Union; judging by EU legislation. The issue is complex and escapes the capacity of

the author of this essay; whereas it is in need of a strict study by experts. Also; in favor of the security of EU legal order; a judgment of the Court of Justice of the European Union would be welcome; if not indispensable.

b. Moreover; as far as the second issue is concerned; it is deducible from the above analysis pertaining to the incompatibility between the Loan Agreements’ terms to the principles and rules of all three levels of superior law (international law; EU law and the Greek Constitution) that the net of provisions formed by those Agreements is blatantly incompatible with the fundamental principles that delimit the European legal environment and culture. The further specification of violations is better left to experts in the fields of international; European and constitutional law; with the legitimate concern that as the examination progresses further; the greater the extent of incompatibility of the Loan Agreements to the European political and legal culture will be revealed.

The contrastive relation of the Loan Agreements’ provisions to the fundamental principles of law and democracy as well as the machination of their conclusion and entry into force; that was mentioned earlier; is the manifestation of an inner undervaluation and decline of European consciousness and the European spirit of law and lawfulness. The Loan Agreements provide two distinct examples of this type of decline. First of all; the fact that the Loan Facility Agreement is filled with terms that aim to the safeguarding of the lender’s economic interests; by violating or encroaching on fundamental rights and principles which are not subject to the parties’ freedom of contract and therefore cannot be negotiated. Taking in to account also the fact that such terms are not also provided in favor of the Borrower; a deep contempt for the principles of bona fides; of equality of contracting parties and also that of respect for personality -principles that go hand in hand with a high level of legal consciousness -is manifested. The second example is the effort; distinct in numerous provisions of the Loan Facility Agreement to transfer all responsibility-even that of the

Lenders- to the Borrower; the document of the Legal Opinion being particularly clear on that matter.

After the signing of the Lisbon Treaty; the EU assumed the state of a political union of sovereign states with the foundations for a political unity.

The solidarity clauses (articles 42 par. 7 TEU and 222 TFEU); the principles of respect for the equality of member-states before the Treaties; the states’ national identity inherent in their fundamental structures; political and constitutional; their essential State functions; including ensuring the territorial integrity of the State; maintaining law and order and safeguarding national security; the declaration of the principle of sincere cooperation which includes mutual respect and mutual cooperation (art. 4 par. 2 and 3 TEU); the European Citizenship for all citizens of EU member-states (articles 20-25 TFEU); the acknowledgement of the right of establishment (article 49- TFEU); the introduction of the Charter of Fundamental Rights of the European Union to the law of the EU; the accession to the ECHR and the acceptance of the Convention principles as general principles of the EU law; the whole “Part One” of the TFEU; containing principles of a general application and many more TEU and TFEU provisions. All the above first of all; constitute significant foundations of the EU as a political entity furthermore they provide a set of multiple guarantees to the sovereignty of member-states.

Having all those guarantees in mind; a European citizen can’t help but wonder how it could be made possible for such Agreements to be concluded between the Union’s member-states. How is it possible for countries of the Eurozone; the core of national sovereignty; equality; solidarity; and bona fide cooperation between member-states; to lay as a prerequisite for the granting of a loan to another member-state the waiver of its national

sovereignty or to enforce the violation of those same fundamental rights and principles that they themselves have been the guarantors of? How can a Loan Agreement validly threaten the territorial integrity of the Borrower state; breach its citizens’ social rights and imperil their welfare? How can it be possible today at the heart of Europe for a treaty to exhibit such social cruelty and such an extent of violations that it resembles the loan Shylock gave in the Shakespearean tragedy? One may wonder; does the threat to the national sovereignty of Greece and the violation of rights of the more vulnerable parts of society; the wound to human dignity the respect for which constitutes greater European principle; not border on “claiming a pound of flesh” of the Borrower - Greek state; as Shylock did?

The infringement via a loan agreement of the fundamental rights of European citizens undoubtedly constitutes a violation of the foundations of the European legal order; which forms part of the European culture and has been the source of great hopes for the European peoples.

It is for this particular reason that Greece’s Loan Agreements constitute a major- if not the greatest- cause for political concern in the EU since its founding; undermining the Union’s foundation and standing in the way of achievement of the European completion. More cause for concern for the corruption of the spirit of European legal order; stems from the fact that as far as the threat to national sovereignty; the violation of fundamental principles of European and international legal order and the method of stating terms are concerned; the Loan Agreements bring to mind the first legal construction of that type concerning a European state; namely the Anan Plan; composed by a British legal firm. Both the content and the tone of said Agreements; give the impression of a traditional international treaty composed by diplomats; an impression of a treaty composed by a law firm of another time for the securitization of a private lender and not of a European member-state. One can’t help but wonder: did the aspect of international relations change? Were the diplomatic and

international law mode of composing international legal documents and application of international law; abandoned in favor of pettifoggery? The concern for the above escalates; if one ponders that the parties to the Loan Agreements -the lenders in particular- had they intended in the lawfulness of the contracts and the safeguarding of European fundamental principles; they would not put into effect a term requiring an a priori Legal Opinion of the Greek Legal Council of State; but they would rather ask for a Legal Opinion of the Court of Justice of the European Union or the organs of the Council of Europe pertaining to the Agreements’ compliance with the European and international legal order; prior to their conclusion.

It also has to be noted that the Lenders were not unaware of the possibility of the Agreements’ incompatibility with the superior international and European law and also of the invalidity that such an incompatibility would mean for the terms of said Agreements. It is to that aim that they set the provisions of articles 6 (6) (a-b); 8 (1) (c) and 11 (1) of the Loan Facility Agreement to secure their own interests in such a case. (See above Chapter 3 d). Had they aimed for genuine lawfulness wouldn’t they have demanded a Legal Opinion from the Court of Justice of the EU or from another independent forum? Or did they not really intend to get an objective Legal Opinion but more one in accordance with their plan?

As mentioned earlier; the terms of the Loan Agreements were known a long time before the Agreements themselves were concluded; nonetheless it has not been discussed whether at the time of negotiations the issue of compatibility of terms to the Greek Constitution and mainly to the European legal framework was debated; or whether there was a request on the part of the Borrower for a Legal Opinion by a the Court of Justice of the EU or the competent authority of the Council of Europe. Moreover; the part the IMF played in the formation of said terms and the composition of the Agreements’ texts is not fully clarified. One

thing is certain though; the terms of any loan agreement are always dictated by the lender. In the present case; all Euro-area member-states apart from the Hellenic Republic. It would be in compliance with the democratic principle as well as politically critical for those particular procedures to be made public; even a posteriori to the member-states of both the EU and the Council of Europe; so that issues of European legal order and political culture could be made part of the discussion.

For all matters brought forward; two questions arise naturally; two easy questions that are often used as excuses. The first question concerns Greece’s heavy responsibility which can hardly be denied (since the present situation is Greece’s fault; let Greece bear the cost of it.); the second one is about the ultimate point of economic downfall Greece is currently facing. (Was Greece able to prevent it in another way?). Nonetheless; both questions can bear the same answer: Human value; democratic principles and fundamental civic and human rights which represent the person and the democratic society as well as sovereignty; cannot be put in par neither with the faults of people and governments nor with a crisis of the state economy however severe. It is crucial for politicians to make that realization and stop subjecting rights and principles to political dealings and compromise. In a democratic state; the defense of those rights and principles of people and of the state sovereignty is not a question of politics. It is a prerequisite. No government can consider itself to be above lawfulness; above the law that is an edifice of each era’s political society. No constitution of a democratic state has ever declared that a state of economic crisis -even in the event of bankruptcy- provides sufficient grounds for the declaration of a state emergency that would justify a constraint in constitutional freedoms. Moreover no democratic constitution and no democratic state has ever allowed -even in an emergency due to a threat in the state’s security- a waiver of state sovereign rights and a decrease in the level of protection social rights of the more susceptible parts of society

In lieu of a conclusion; I would like to make a wish at the same time being a plea and a suggestion to the Greek political leaders as well as those of the European Union member-states: Let the Loan Agreements be cleared of all those provisions that constitute a defiance and an insult to Greek and European legal order alike.