The EU’s Response to the Economic Crisis and its Implications for Labour Law in Europe

The European sovereign debt crisis is having profound consequences for the labour law and industrial relations systems of the debt-affected member states and for the role of social policy at EU level. Driven by the need to initiate a process of ‘internal devaluation’ so as to restore the competitiveness of the national economies, public deficit reduction measures have been coupled with in-depth structural labour market reforms in a number of EU Member States, including Greece and Portugal. The latter are not only aimed at ensuring wage moderation but also at amending essential features of the industrial relations systems via changes in employment protection legislation and collective bargaining. The paper provides an evaluation of the scope and extent to which the austerity measures that have been introduced in EU Member States on the basis of the structural adjustment programmes implemented with the support of the ‘Troika’, i.e. the European Central Bank (ECB), the European Commission (EC) and the International Monetary Fund (IMF), can be legally challenged before supranational judicial bodies. By using as examples the cases of Greece and Portugal, the analysis assesses the scope for the development of litigation involving specifically the Court of Justice of the European Union, the European Court of Human Rights and the Council of Europe.Links between legal values at EU and Council of Europe levels and the austerity measures at national level provide scope for using the supranational legal framework at domestic level for assessing the lawfulness of austerity reforms.