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THE FACTS
1. The first applicant, Ms Ioanna Koufaki, is a Greek national who was born in 1967 and lives in Athens. She was represented before the Court by Mr I. Adamopoulos, Mr V. Chirdaris and Mr A. Argyros, lawyers practising in Athens. The second applicant is the Confederation of Public-Sector Trade Unions (ADEDY). It was represented before the Court by Ms M.‑M. Tsipra and Mr M. Miliarakis, lawyers practising in Athens.
A. The circumstances of the case
2. The facts of the case, as submitted by the applicants, may be summarised as follows.
3. The first applicant is a member of the Athens Bar and since 2 March 2001 has been on the scientific staff of the Greek Ombudsman’s Office. On that date she commenced employment under a private-law contract for an initial five-year period and subsequently on an indefinite basis. Her pay was governed by Laws nos. 2477/1997 and 3205/2003 on the salary rules applicable to public servants and public-sector employees. On 10 April 2012 she was seconded to the central department of the Technical Chamber of Greece (Techniko Epimelitirio Ellados), a corporate body governed by public law.
4. The second applicant is a trade union organisation representing several unions of public-sector workers employed on a permanent basis or under private law by the State, corporations governed by public law and the local and regional authorities. Its main aim is to defend the economic, social and professional interests of public-sector workers, including with regard to pension issues.
5. On 15 March 2010 Law no. 3833/2010, entitled “Protection of the national economy – Urgent measures to respond to the financial crisis” was published in the Official Gazette ... The Law reduced the pay of persons working in the public sector – irrespective of their employment status – by a percentage ranging from 12% to 30%, notwithstanding any other specific or general legislation, collective agreement, arbitration ruling or individual agreement or contract (section 1). It established a new pay ceiling for all persons working in the public sector (section 2) and set out the government’s 2010 revenue policy. The above-mentioned reductions were to apply retrospectively from 1 January and 1 March 2010.
6. On 3 May 2010 the Minister of Finance and the Governor of the Bank of Greece, representing the Hellenic Republic, and the European Union’s Commissioner for Economic and Monetary Affairs, signed a memorandum of understanding. This document set out in detail the measures comprising a three-year programme drawn up by the Greek authorities after consultation with the European Commission, the European Central Bank and the International Monetary Fund. It stated, inter alia, that “[i]ncomes and social security policies need to buttress the fiscal adjustment effort and restoration of competitiveness. Realigning incomes to sustainable levels is necessary to assist fiscal correction, support a reduction in inflation well below the euro area average, and improve price and cost competitiveness on a lasting basis”. Further on, the document stated as follows:
“The government is committed to fairness in the distribution of the adjustment burden. Our resolve to protect the most vulnerable in society from the effects of the economic downturn was taken into account in the design of the adjustment policies. In consolidating government finances, larger contributions will be raised from those who have traditionally not carried their fair share in the tax burden. With regard to the reduction in public wages and in pensions, the minimum earners have been protected: [as regards] pension reductions: The elimination of the 13th and 14th pensions is compensated, for those receiving less than €2500 a month, by introducing a new flat bonus of €800 a year. The benefit reduction is weighted toward the higher pension earners. Wage bill reductions. The 13th and the 14th wage payments will be eliminated for all employees. To protect the lower income segment, here too, for those receiving less than €3000 a month, a flat bonus payment of €1000 a year per employee will be introduced, which will be financed through cutting salary allowances for higher income segments.”
7. On 6 May 2010 Law no. 3845/2010 on measures to implement the euro area/IMF financial stabilisation mechanism for Greece was published, essentially ratifying the memorandum of understanding with regard to relations between Greece and the euro area Member States. Section 3 of the Law reduced public-sector pay by a further 8%. Section 4 increased the rate of VAT and the special consumption taxes.
8. On 8 and 10 May 2010 the Finance Minister signed two agreements: the “Loan Facility Agreement between certain Euro Area Member States and KfW (as Lenders) and the Hellenic Republic (as Borrowers) and the Bank of Greece (as the Borrower’s Agent)”, and the “International Monetary Fund Stand-by Arrangement”.
9. Under Laws nos. 3833/2010 and 3845/2010 the first applicant, who had been receiving a gross monthly salary of 3,339 euros (EUR) (leaving her with a net salary of EUR 2,435.83) had her special allowance reduced by 20% from 1 January 2010 and her “Easter” allowance cut by 30%. The latter was subsequently abolished altogether, together with the “Christmas” allowance and the holiday allowance. More specifically, the first applicant’s gross salary had been made up of a basic salary of EUR 2,311, a family allowance of EUR 53, a graduate allowance of EUR 45 and a special allowance of EUR 752.93. The last of these allowances had been set at EUR 930 on 1 January 2008 but was reduced by 12% on 1 January 2010 and by a further 8% on 1 June 2010. With the entry into force of Law no. 3845/2010, the applicant’s Christmas, Easter and holiday allowances were stopped since her total monthly pay exceeded EUR 3,000... .
10. Law no. 3847/2010 reduced the amount of these allowances for public-sector retirees and abolished them altogether for those under the age of sixty.
11. On 26 July 2010 the applicants and other individuals applied to the Supreme Administrative Court: the first applicant applied for judicial review of her pay statement, while the second applicant sought judicial review of the adverse impact which the above-mentioned laws would have on its members’ financial situation. The persons lodging the applications alleged that the laws in question were in breach of the Constitution and of various international instruments including Article 1 of Protocol No. 1.
12. On 20 February 2012 the Supreme Administrative Court, sitting as a full court, rejected the applications for judicial review (judgment no. 668/2012, finalised on 2 March 2012). ...
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13. On 28 February 2012 an administrative decision adopted under Law no. 4024/2011 (laying down rules on pensions, salary scales, appraisal, the creation of a reserve of posts and other measures to implement the public finances medium-term strategic plan (2012-15)) cut the applicant’s salary by a further EUR 700, bringing her net monthly salary to EUR 1,885.79.
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COMPLAINTS
20. Relying on Article 1 of Protocol No. 1, the applicants complained of the cuts in wages and pensions resulting from Laws nos. 3833/2010, 3845/2010 and 3847/2010. The second applicant also alleged violations of Articles 6 § 1, 8, 13, 14 and 17 of the Convention.
THE LAW
21. The applicants alleged a violation of Article 1 of Protocol No. 1, which provides:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
22. The applicants submitted that the right of all public-sector employees to payment of their salary formed part of their possessions and fell within the sphere of protection of Article 1 of Protocol No. 1. They maintained that the reduction in wages and pensions provided for by Laws nos. 3833/2010, 3845/2010 and 3847/2010, which had introduced continuing and permanent measures, abolished the Christmas and Easter allowances and the holiday allowance and reduced the amount of the special allowance by 20%, amounted to a deprivation of possessions.
23. The applicants submitted that the concept of “public interest” referred to in the first paragraph of Article 1 of Protocol No. 1 did not relate simply to the interests of the State treasury, the elimination of the budget deficit or the stability of public finances. Invoking the public interest presupposed giving a detailed demonstration in the form of an economic study which examined in advance all alternative solutions and measures with a less drastic impact. Deprivation of possessions should be considered only as a measure of last resort.
24. The aforementioned laws did not transpose rules of international law into the domestic legal order. The rules they put in place were unconstitutional, as they ran counter to fundamental constitutional principles (the principle that public liabilities should be borne equally and the proportionality principle) and to the social rights guaranteed by the Constitution. Invoking the adverse economic situation, like invoking any public interest, was liable to undermine the domestic legal order and in particular the overriding legal force of the Constitution and the Convention vis-à vis ordinary legislation. The incompatibility of the rules with the Constitution and the Convention undermined not just some protective aspects of social and employment rights but the entire social policy of the Greek State.
25. As to the proportionality principle, it required the legislature, before adopting the measures in question, to examine whether their impact would be permanent or temporary, whether the scope and duration of the restrictions imposed were compatible with the aim pursued and whether they were accompanied by compensatory measures (for instance, a reduction in direct or indirect taxation and in the price of basic essentials).
26. The first applicant submitted in particular that despite the fact that her pay had been reduced permanently she had received no compensation for that deprivation of possessions or any promise of compensation in another form, such as a reduction in working hours, a lowering of interest rates or a reduction in loan repayments. Nor had any measure been taken to allow her to compensate for the deprivation of her possessions, for instance by practising as a lawyer in addition to her duties in the Ombudsman’s Office. On the contrary, her financial situation had been made worse by the imposition of intolerable taxation measures: a professional tax of EUR 753.43, a special property tax, and a supplementary tax of EUR 1,731 on 2012 income. These were compounded by the rise in the price of basic essentials, fuel and public service charges. All those measures taken together had led to a drastic fall in her standard of living.
27. More specifically, the first applicant had originally received a gross monthly salary of EUR 3,339 (with a net salary of EUR 2,435.83), made up of a basic salary of EUR 2,311, a family allowance of EUR 53, a graduate allowance of EUR 45 and a special allowance of EUR 930. She had also received a Christmas allowance, an Easter allowance and a holiday allowance, the amounts of which were not specified in the application. After the entry into force of Laws nos. 3833/2010 and 3845/2010 the first applicant’s special allowance was reduced from EUR 930 to EUR 752.93 and her Christmas, Easter and holiday allowances were cut back and later abolished. In addition, after the above-mentioned laws had been passed a further administrative decision was adopted on 28 February 2012 under Law no. 4024/2011, reducing the applicant’s salary by a further EUR 700 and leaving her with a net monthly salary of EUR 1,885.79.
28. The second applicant complained of the fact that the legislation in question introduced the same cuts for all public servants irrespective of salary. In particular, the reduction in public servants’ allowances and the abolition of the thirteenth and fourteenth salary payments affected high and low earners alike. Similarly, the reduction in the thirteenth and fourteenth pension payments affected persons with a small pension in the same way as those who received EUR 2,500 a month. Moreover, those payments had been abolished altogether for retired persons under sixty.
29. In view of the similarity between the cases in terms of the facts and the substantive issues they raise, the Court considers it necessary to join them and to examine them together in a single decision.
30. A question arises at the outset as to whether the second applicant can claim the status of “victim” within the meaning of Article 34 of the Convention. However, the Court considers that it is unnecessary to address this issue since, even assuming that the applicant has “victim” status, the complaints it raises are in any case inadmissible for the reasons set out below.
31. The Court reiterates that the States Parties to the Convention enjoy quite a wide margin of appreciation in regulating their social policy. As the decision to enact laws to balance State expenditure and revenue will commonly involve consideration of political, economic and social issues, the Court considers that the national authorities are in principle better placed than the international judge to choose the most appropriate means of achieving this and will respect their judgment unless it is manifestly without reasonable foundation (see Terazzi S.r.l. v. Italy, no. 27265/95, 17 October 2002; Wieczorek v. Poland, no. 18176/05, 8 December 2009; Jahn and Others v. Germany [GC], nos. 46720/99, 72203/01 and 72552/01, ECHR 2005-VI; Mihaieş and Senteş v. Romania (dec.), nos. 44232/11 and 44605/11, 6 December 2011; and Frimu and 4 other applications v. Romania (dec.), nos. 45312/11, 45581/11, 45583/11, 45587/11 and 45588/11, § 40, 7 February 2012). This margin is even wider when the issues involve an assessment of the priorities as to the allocation of limited State resources (see O’Reilly and Others v. Ireland (dec.), no. 54725/00, 28 February 2002; Pentiacova and Others v. Moldova (dec.), no. 14462/03, 4 January 2005; and Huc v. Romania and Germany (dec.), no. 7269/05, § 64, 1 December 2009).
32. According to the Court’s well-established case-law, the principles which apply generally in cases concerning Article 1 of Protocol No. 1 are equally relevant when it comes to salaries or welfare benefits (see, mutatis mutandis, Stummer v. Austria [GC], no. 37452/02, § 82, ECHR 2011). The first and most important requirement of Article 1 of Protocol No. 1 is that any interference by a public authority with the peaceful enjoyment of possessions should be lawful and that it should pursue a legitimate aim “in the public interest”. Any interference must also be reasonably proportionate to the aim sought to be realised. In other words, a fair balance must be struck between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights. The requisite balance will not be found if the person or persons concerned have had to bear an individual and excessive burden (see Khoniakina v. Georgia, no. 17767/08, § 70, 19 June 2012).
33. Furthermore, Article 1 of Protocol No. 1 cannot be interpreted as giving an individual a right to a pension of a particular amount (see, in particular, Skorkiewicz v. Poland (dec.), no. 39860/98, 1 June 1999; Jankovic v. Croatia (dec.), no. 43440/98, ECHR 2000-X; Kuna v. Germany, (dec.), no. 52449/99, ECHR 2001-V; Blanco Callejas v. Spain (dec.), no. 64100/00, 18 June 2002; Maggio and Others v. Italy, nos. 46286/09, 52851/08, 53727/08, 54486/08 and 56001/08, § 55, 31 May 2011; Valkov and Others v. Bulgaria, nos. 2033/04, 19125/04, 19475/04, 19490/04, 19495/04, 19497/04, 24729/04, 171/05 and 2041/05, 25 October 2011; and Frimu and 4 other applications v. Romania, cited above, § 40) or to a salary of a particular amount (see Panfile v. Romania (dec.), 13902/11, § 18, 20 March 2012).
34. The Court considers that the restrictions introduced by the impugned legislation should not be considered as a “deprivation of possessions” as the applicants claim, but rather as interference with the right to the peaceful enjoyment of possessions for the purposes of the first sentence of the first paragraph of Article 1 of Protocol No. 1 (see Kjartan Ásmundsson v. Iceland, no. 60669/00, § 40, ECHR 2004-IX; Wieczorek, cited above, § 61; and Valkov and Others, cited above, § 88; see also, mutatis mutandis, Maurice v. France [GC], no. 11810/03, §§ 67-71 and § 79, ECHR 2005-IX; Draon v. France [GC], no. 1513/03, §§ 70-72, 6 October 2005; and Hasani v. Croatia (dec.), no. 20844/09, 30 September 2010).
35. The Court notes that the interference was provided for by law, namely Laws nos. 3833/2010 and 3845/2010.
36. In assessing the public interest of the measures in question, the Court attaches particular weight to the report accompanying Law no. 3833/2010 and to the reasoning of judgment no. 668/2012 of the Supreme Administrative Court.
37. The Court notes first of all that the adoption of the impugned measures was justified by the existence of an exceptional crisis without precedent in recent Greek history. As stressed by the report accompanying Law no. 3833/2010, this was “the worst crisis in the public finances for decades”, which “[had] undermined the country’s credibility, thwarted efforts to meet the country’s lending needs and pose[d] a serious threat to the national economy”. The report stated that finding a way out of the crisis represented “a historic responsibility and a national duty” and that Greece had undertaken to “achieve fiscal consolidation on the basis of precise targets and a precise timetable”... .
38. The Supreme Administrative Court further noted, in judgment no. 668/2012, that the reduction in the salaries, allowances, bonuses and retirement pensions of persons working in the public service, as a result of the above-mentioned laws, formed part of a wider programme of public finance adjustment and structural reform of the Greek economy which, taken as a whole, was designed to meet the country’s pressing financing needs and to improve its future economic and financial prospects. Those aims were in the general interest and also coincided with those of the euro area Member States, in view of the requirement under European Union legislation to ensure budgetary discipline and preserve the stability of the euro area. By their very nature, the measures in question therefore contributed to an immediate reduction in public spending ... .
39. In that connection the Court reiterates that the notion of “public interest” is necessarily extensive. As it has already noted, the decision to enact laws to balance State expenditure and revenue will commonly involve consideration of political, economic and social issues, and the margin of appreciation available to the legislature in implementing social and economic policies is a wide one. The Court will thus respect the legislature’s judgment as to what is “in the public interest” unless that judgment is manifestly without reasonable foundation (see Jahn and Others, cited above, § 91; Zvolský and Zvolská v. the Czech Republic, no. 46129/99, § 67 in fine, ECHR 2002-IX; and Mihaieş and Senteş, cited above, § 19). In matters of general policy, on which opinions within a democratic society may reasonably differ widely, the role of the domestic policy-maker should be given special weight (see James and Others v. the United Kingdom, 21 February 1986, § 46, Series A no. 98, and Valkov and Others, cited above, § 92).
40. The Court also notes that, in addition to the salary-related measures laid down in Laws nos. 3833/2010 and 3845/2010, other measures had been introduced under different legislation aimed, among other things, at restoring tax equity and tackling tax evasion, reforming the social-security system and the public servants’ retirement scheme, reviewing the procedures for checking and auditing the public finances, opening up certain closed occupations and placing State-owned companies on a sounder footing.
41. In view of the above considerations, the Court has no reason to doubt that, in deciding to cut public servants’ wages and pensions, the legislature was acting in the public interest.
42. It remains to be determined whether a fair balance was struck in the instant case between the demands of the general interest of the community and the requirements of the protection of the fundamental rights of the first applicant and the second applicant’s members.
43. The Court observes that Law no. 3833/2010 reduced by 12% the wages and pensions of all persons who worked or had worked in the public service. Law no. 3845/2010, enacted two months later, reduced wages and pensions by another 8%, cut the Christmas, Easter and holiday allowances to EUR 500, EUR 250 and EUR 250 respectively and further stipulated that the overall monthly payments should not exceed EUR 3,000. The measures provided for by Law no. 3845/2010 were deemed necessary by the legislature in view of the fact that those adopted previously under Law no. 3833/2010 had proved insufficient to tackle the country’s stricken economic situation.
44. The Court attaches particular weight to the reasons given by the Supreme Administrative Court which, in its judgment of 20 February 2012, dismissed several arguments to the effect that the measures in question had breached the proportionality principle. More specifically, the Supreme Administrative Court held that the fact that the cuts in wages and pensions were not merely temporary was justified, since the legislature’s aim had been not only to remedy the acute budgetary crisis at that time but also to consolidate the State’s finances on a lasting basis. It also referred to the Court’s case-law concerning cuts in wages and pensions of the kind made by a number of States in the same overall context of economic crisis. It further observed that the applicants before it had not claimed specifically that their situation had worsened to the extent that they risked falling below the subsistence threshold.
45. The Court notes that the first applicant provided detailed information on her income prior to the entry into force of Laws nos. 3833/2010 and 3845/2010, after the entry into force of that legislation and after the entry into force of the administrative decision adopted under Law no. 4024/2011. Thus, her net salary fell from EUR 2,435.83 to EUR 1,885.79 (see paragraphs 9 and 13 above).
46. The Court considers that the extent of the reduction in the first applicant’s salary was not such as to place her at risk of having insufficient means to live on and thus to constitute a breach of Article 1 of Protocol No. 1. In view of the foregoing and of the particular context of crisis in which the interference in question occurred, the latter could not be said to have imposed an excessive burden on the applicant.
47. As to the proportionality of the impugned measures with regard to the wages and pensions of the public servants affiliated to the second applicant, the Court would simply refer to the text of the memorandum of understanding itself. According to the memorandum, the abolition of the thirteenth and fourteenth pension payments was compensated for, in the case of persons receiving less than EUR 2,500 per month, by the introduction of a flat-rate bonus of EUR 800 per year. Furthermore, while the thirteenth and fourteenth salary payments were abolished across the board, an annual bonus of EUR 1,000 was introduced, funded by the reduction in the allowances previously payable to higher earners. This bonus was introduced with the aim of protecting those in the lowest income segments (persons receiving less than EUR 3,000 per month) (see paragraph 6 above).
48. As regards alternative solutions, their possible existence does not in itself render the contested legislation unjustified. Provided that the legislature remains within the bounds of its margin of appreciation, it is not for the Court to say whether the legislation represented the best solution for dealing with the problem or whether the legislature’s discretion should have been exercised in another way (see James and Others, cited above, § 51, and J.A. Pye (Oxford) Ltd v. the United Kingdom, no. 44302/02, § 45, 15 November 2005).
49. Consequently, the Court considers that the complaint concerning Article 1 of Protocol No. 1 is manifestly ill-founded and must be dismissed under Article 35 §§ 3 (a) and 4 of the Convention.
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For these reasons, the Court unanimously
Joins the applications,
Declares the applications inadmissible.
André WampachIsabelle Berro-Lefèvre
Deputy RegistrarPresident
Full & Egal Universal Law Academy