Tuesday, May 11, 2021

Broadening access to Covid-19 vaccines: intellectual property dilemmas and the role of the EU


Giuseppe Mazziotti, Trinity College Dublin

 

Introduction

In the past few months, the World Health Organization (WHO) has been claiming that the only effective solution to immunize the world's population from the SARS-CoV-2 virus is a vaccine intended as a common or public good, accessible to everyone without geographical and economic discriminations. However, it has been hard to achieve such an ambitious goal at a time global intellectual property law, as defined under the TRIPS (Trade Related Aspects of Intellectual Property Rights) Agreement administered by the World Trade Organization (WTO), conceives drugs mostly as a form of private property subject to patent protection. 

 

Unfortunately, none of the limitations of pharmaceutical patent protection embodied in the TRIPS Agreement applies to a health emergency with no geographical boundaries, such as the current pandemic. A specific solution to this problem might derive from the adoption of a pandemic treaty, an idea that the WHO will start discussing in an assembly in May 2021. Such an unprecedented instrument could pave the way for international obligations enabling free access to life-saving drugs, such as vaccines, and effective standards of supranational sharing of scientific knowledge on a free or at least sustainable basis for all the world’s countries. 

 

At government level, the disruptive effects the Covid-19 pandemic has had even within the most-developed countries have spurred a predominantly nationalist approach to public health protection, to the detriment of an international cooperation and solidarity. This approach has made the wealthiest countries compete in securing the largest supplies from each of the vaccine manufacturers for their own peoples, to reach a long-awaited (although purely territorial) herd immunity. In this scenario, least developed countries and other poor economies have been benefiting from initiatives that public-private institutions and consortia such as Medicines Patent Pool (United Nations), the WHO’s Technology Access Pool (TAP) and GAVI’s Covaxinitiative are currently putting in place to broaden distribution of available vaccines. 

 

Compulsory licensing

In this unprecedented situation - at least in the past century – it is hard to understand why the European Union and its member states have not tried to implement powerful legal instruments that are expressly contemplated under the TRIPS Agreement, such as compulsory licences of pharmaceutical patents. The sole fact of openly taking them into consideration or threatening their use within their own borders, while negotiating with pharmaceutical companies, would have allowed EU members to obtain better prices and conditions for their vaccine supplies. 

 

According to the original version of the TRIPS Agreement (1994), each WTO member was entitled to allow uses of a patented drug without the right-holder’s consent in cases contemplating national emergencies or circumstances of extreme urgency, predominantly for the supply of the domestic market. This exception entailed that countries without domestic manufacturing capacity in the pharmaceutical sector could never have used this tool to enable access to generics. It was South Africa that, in 1997, amended its patent law to allow its Minister of Health to provide affordable generic forms of essential drugs, including anti-HIV therapies,triggering a harsh reaction from pharmaceutical groups and the US government, which claimed a violation of WTO law. It was in that historical context that the 2001 Doha Declaration on the TRIPS Agreement and Public Health amended the Agreement to allow WTO members not only to locally manufacture but also to import (and export) generic versions of patented medicines. The EU strongly supported this amendment by passing Regulation 816/2006, which enables EU member states to readily respond to help requests coming from third countries having no manufacturing capacity and legalize production and export of generics within the limits justified by each health emergency.    

 

The role of the EU 

What should the EU have done, and what it could still do, to make access to available Covid-19 vaccines faster, fairer, and wider, even in least developed and developing countries that, for obvious historical reasons, look at Europe in situations of health and humanitarian crises?

 

Serious delays in the current vaccine rollouts are not entirely a European Union’s fault. The Commission and other EU bodies have found themselves facing the Covid-19 pandemic emergency without controlling two essential areas which are fundamental to the development and distribution of vaccines, namely: (i) health systems, which are strictly state-owned, and (ii) the European patent system, whose organization, the European Patent Organisation (which includes the European Patent Office) is not a EU institution and does not pursue full harmonization (or unification) of national patent laws, especially in the domain of patent exceptions and compulsory licences. 

 

The purely contractual path the EU Commission has decided to take, with the support of its complex bureaucracy, by centralizing all acquisitions and supplies of vaccines for the EU population, proved to be much less effective and timely than vaccination campaigns in the United States and the United Kingdom. The ensuing restrictions EU member states took, in an uncoordinated and very often anti-European fashion, established unprecedented exceptions to the principles of free movement of people and unity of the Single Market, which are authentic cornerstones of the European Union. This nationalist approach has resulted in immeasurable damages to European economies and the sacrifice of European citizens’ fundamental rights that national authorities have imposed without adequate justification and a reasonable time limit. The fact that the Commission intends to re-establish free movement of tourists and other travelers through a Digital Green Certificate without seeking to ensure a significant acceleration of vaccine rollouts is a further blow to citizens’ fundamental rights and to the Schengen agreement. 

 

If vaccination campaigns are being so heavily delayed and widely unpredictable, causing so much economic harm, why has not the European Union discussed and tabled intergovernmental or legislative initiatives that could have significantly increased production and supplies of Covid-19 vaccines on a EU-wide basis? Why has not it encouraged EU member states to plan a concerted application of Regulation 816/2006, to help third countries produce and import life-saving vaccines? Even more importantly, why has not the EU immediately endorsed the proposal for a temporary waiver of Covid-related pharmaceutical patents that India, South Africa and dozens of other countries made before the WTO Council, from October 2020 onwards? Having expressly acknowledged the relevance and desirability of a relaxation of patent rights and having advocated, one year ago, the idea of vaccines as public goods through its President Von der Leyen, the EU should have taken the lead in supporting compulsory licences or temporary waivers at international level. A lead that is now being taken by the US trade representative before the WTO following a statement of President Biden on May 5th, 2021. 

 

The position of EU member states  

Given this inaction at the EU level, and lack of uniformity under national patent laws, national governments found themselves in very different situations. Most EU countries (including Austria, Belgium, Czech Republic, Denmark, Spain, Finland, Greece, Croatia, Netherlands, Poland, Portugal, Romania, Sweden) already had provisions in their legislation allowing compulsory licences to enable access to essential drugs on public health grounds or, through a broader definition, in the public interest. Other EU members (such as France, Germany, and Hungary) took a step further by reforming their patent laws to be able to broaden and streamline use of this powerful tool for specific purposes related to the Covid-19 pandemic. Other EU countries, instead, did not take any measures in this field, buying the argument of the pharmaceutical industry that vaccine manufacturers could have coped with the ongoing emergency doing their business as they usually do, i.e., through voluntary licences. The fact that countries like Ireland and Italy are part of the latter group should not come as a surprise if one considers how strong and influential the lobbying of large pharmaceutical companies headquartered in both countries can be on governments, political parties, and the media. 

 

A policy agenda under the control of the EU

Within the policy areas entirely under the control of the European Union, two of them could play a greater role in improving and broadening access to vaccines in the current pandemic. The first is the pharmaceutical law concerning quality and safety controls, as well as market authorizations, based on the federal regulatory power of EMA, whose acts are uniformly valid throughout the EU. The second one is competition (or antitrust) law.

 

As regards pharmaceutical regulations, one can only imagine the administrative and public health chaos the EU would have faced if a pandemic like Covid-19 had broken out before the establishment of a centralised procedure for market authorisations in 2004. Twenty-seven national pharmaceutical agencies would have made potentially conflicting decisions, making the actual harm even bigger than it has been. In this context, the authority of EMA ensured not only uniformity but also availability of ad hoc and fast-track procedures, where all the relevant data and clinical trials related to Covid-19 vaccines have been examined as soon as their manufacturers submitted them (rolling review). What could be done at this stage is a reform of the EU regime of market exclusivity, which currently grants pharmaceutical companies a proprietary right to control access to their drugs’ clinical trials and data and to prevent third parties from producing generic versions. In a context such as a pandemic, these exclusive rights should be limited or suspended to make compulsory licences immediately effective.

 

As far as antitrust is concerned, the EU Commission has extensive powers of investigation, inspection, and sanction against companies to verify whether serious delays and failures in the supply of Covid 19 vaccines to EU countries are in any way linked to any refusal to grant licences or to agreements (which would clearly be illegal) aimed to slow down the sale on the market of much larger amounts of vaccines. A serious investigation on this front would be much more effective than any lawsuits like those that the EU Commission and some national governments (including Italy) have threatened against manufacturers because of their delays and failures to provide contractually agreed supplies. 

 

Conclusion

Exceptional circumstances such as a pandemic justify limitations of the scope of intellectual property rights, whose strict enforcement has harmful consequences on people’s right to health and other fundamental rights. It is time for EU institutions and national governments to act in a much more coordinated way and to use exceptional powers they have at their disposal or whose availability depends on reforms and policy changes that, especially at international level, would greatly help face global health emergencies in the future.  

 

Giuseppe Mazziotti is a Fellow and Assistant Professor at Trinity College Dublin.

 

Suggested citation: Giuseppe Mazziotti, ‘Broadening access to Covid-19 vaccines: intellectual property dilemmas and the role of the EU’, COVID-19 Law and Human Rights Observatory (11 May 2021) https://tcdlaw.blogspot.com/2021/05/broadening-access-to-covid-19-vaccines.html

 

Thursday, May 6, 2021

Ireland most stringent Covid restrictions in EU since January: Way out of lockdown has to keep on prioritising children’s education

 

Stephan Köppe, UCD School of Social Policy, Social Work and Social Justice 

Robert Cazaciuc, UCD College of Social Sciences and Law

 

Inrtroduction

Despite the vaccine rollout, governments across the globe still grapple with containing the Covid infections, keeping hospitalisations down and preventing a surge in fatalities. Since last spring, a group of researchers and volunteers, led by Oxford University, have tracked the multiple government restrictions to citizens, businesses and society at large in almost every part of the world. Last week we have launched the UCD Covid Compared dashboard – in short UCD CoCo – to easily access the underlying data of these Covid policy responses and make the tremendous work of the Oxford team more accessible to everyone through simple colour-coded tables and graphs.

 

Table 1: Ten most stringent countries in Europe since March 2020




 













Following the third lockdown and opening up of Ireland in April, the obvious question is how strict were Ireland’s rules compared to other EU countries? Out of 42 countries, Ireland had the 3rd most stringent restrictions since the beginning of the pandemic. Only Italy and the UK had enacted tougher rules since March 2020. Broken down by some key indicators, Ireland had closed workplaces and businesses much longer and tougher than any other European country. Similarly, on public transport restrictions Ireland is within the top 5 and for stay-at-home requirements and school closures within the top 10. Most noticeable is that Ireland’s rules on international travel were very lax throughout 2020 and were only tightened after the Christmas travel debacle (Figure 1).

 

Figure 1: Lax international travel restrictions compared to EU28





 

Toughest Lockdown in First Quarter of 2021

Between January and March this year, Ireland had the toughest restrictions in place across Europe. Of course, Ireland also faced the worst incidence rate during that time and the health system was at the brink of collapse. It is still too early to fully assess if these tight rules have contributed to the overall low mortality rate. In the middle of a pandemic it is very hard for social scientists to evaluate which of the policy measures has contributed to keep the infection rate down and how other factors outside of the control of governments have mitigated the mortality rate. It has been argued that the relative young age profile of the Irish population might have kept the mortality rate down, despite the virus circulating relatively freely in December. On the other hand the returning Irish diaspora, who was desperate to visit loved ones over Christmas, might have fuelled the surge of the virus back then more than in other countries. Despite the overall tight the restrictions, the lax international travel rules might have been the weak link in our Covid defences.

 

While all restrictions were escalated quickly to their maximum in January, our UCD CoCo Dashboard also reveals how the coalition emphasised to reopen schools quickly this time, compared to relative late reopening of creches and schools in the first wave (Figure 2). While having enacted the maximum restrictions in other areas of society, the educational progress of children – and mental health of working parents – had been rightly prioritised. However, Ireland continued to score very weakly on travel restrictions, testing policies and contract tracing during the third lockdown. These apparent flaws in health service related indicators may contribute to the stubbornly high case rate across the country, despite shutting down the country with relative blunt containment instruments.

 

Figure 2: Ireland reopens schools late in first wave, but prioritises return to schools in third lockdown compared to EU28




 

In the Dark about Enforcement 

Although UCD CoCo reveals that Ireland is among the most stringent rule makers, we cannot assess its enforcement. For instance, Ireland had a very poor record in enforcing the anyway permissive quarantine and travel restrictions. Despite some high-profile media investigations that led to the resignation of the EU Commissioner Phil Hogan, this was the exception rather than the norm. Such public outcries highlighted the lack of enforcement across the country and everyone driving through check points played along the charade associated with tough rules and weak enforcement. We also do not know yet, if the tighter restrictions were more effective in keeping the population safe or the economy rolling.

 

Encourage Data-driven Public Debate

What we do know is that Ireland had – on paper – enacted one of the most stringent Covid policy responses in Europe. Whether it has paid off, we will only know once the majority of the population has been vaccinated and this is all over. Regardless of whether we cheer to the Irish success regarding managing the pandemic or drink down the poor government record with sorrow in a pub, at least we know then that it is over. However, the public debate on which policies were successful will continue for a bit longer. We hope that the UCD CoCo can contribute to this policy discussion by making the key data and indices more accessible for everyone.

 

 

Dr Stephan Köppe is Assistant Professor of Social Policy and Robert Cazaciuc is Master of Public Policy student at UCD.

 

Suggested citation: Stephan Köppe and Robert Cazaciuc ‘Ireland most stringent Covid restrictions in EU since January: Way out of lockdown has to keep on prioritising children’s education’ COVID-19 Law and Human Rights Observatory (6 May 2021) https://tcdlaw.blogspot.com/2021/05/ireland-most-stringent-covid.html

Tuesday, May 4, 2021

The Ghost of Crisis Past - Social Partnership 2.0 (Pandemic patch)

    Jack Larkin, Pembroke College, University of Oxford.

Social Partnership is on the march again, maybe. Oft-blamed as one of the key contributors to the last economic crisis (unfairly), there is talk in the Pandemic of reviving the idea in a new, jazzy form: social dialogue. Everyone seems to have agreed not to use the actual term ‘social partnership’, and also not to confine the model to grubby wage deals; social dialogue will be more into a holistic approach to how society and government can work together for the common good: a new social contract.

 For some, the green shoots for this new social partnership (for simplicity I’m going to keep using the term) appeared earlier during the pandemic, for example, s. 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020, which provides for wage subsidies for employees, initially excluded women who were returning from maternity leave. The unions rightly sought to have this changed. The Government admitted the oversight and the Oireachtas amended the Act.

More substantially, the Labour Employer Economic Forum has been pointed to as another example of the idea’s success, as it contributed to the first ‘return-to-work’ policy following Lockdown 1.

For others (read: myself), it’s difficult to see how such examples avoid the elision of ‘social partnership’ with its more anaemic cousins: ‘public pressure’ and the even punier ‘engagement with civil society’. For example, the children’s shoes issue: children’s clothing in general was ‘non-essential’ last October; then it simultaneously became ‘maybe essential but under review’ and ‘absolutely essential, awaiting urgent reform’. Would we say these changes were ‘social partnership’ simply because some social partners were involved?

Moreover, it’s difficult to see how social partnership can be seen to be flowering again in Ireland when one considers the following events, all of which occurred during pandemic. First, the collapse of the Low Pay Commission talks last September, wherein unions were unable to get a mere 20c increase on the minimum age. Second, the looming threats of industrial action by teachers. Third, the State’s demonstrated lack of trust with what workers and employers are spending their welfare supports on. Fourth, the more general criticism, made prominently on this blog, that the State and society often seem to be out of sync in their understanding of what is and is not restricted.

So it’s fair to say that the pandemic has not been Ireland’s moment for a Union Sacrée.

But this piece isn’t about pummelling the concept of social partnership as it’s sometimes (mis)understood. It’s  short piece about what a return of the idea could mean for society and law in Ireland.

But first, some history.

Partnering Down

When the financial music stopped in 2008, the social partners finished dancing too: IBEC was out; ICTU was out; and for the politicians clearing away the broken glass, there was a sense that the model, bargained as it was outside the Oireachtas, was a bit subversive. As Enda Kenny said at the time:

The social partnership model practised by previous governments had become a closed shop, where decisions with national consequences were made behind closed doors by a chosen few, accountable to nobody.

He had a point (ironic as it was from the man who ran the Economic Management Council). For example, the decision to exempt the Public Service Benchmarking Body (responsible for much of research justifying the wage increases under social partnership) from the Freedom of Information Act led to budgetary expenditure which was difficult to scrutinise without the relevant data.

We see now that the social partnership initiatives which survived the crash (or have been set up since) have pleasant names which convey a certain openness: they’re forums, commissions, centres: transparent bodies whose minutes and publications can be read on State websites.

The current momentum following the pandemic seems to be all about intensifying these forums: ramp up the Labour Employer Economic Forum – get the Low Pay Commission talking about the living wage again – have a new code that might sometimes be used at the Workplace Relations Commission.

In the meantime, however, the government is dead against giving any actual substantial legal rights to unions and workers vis a vis collective bargaining and minimum wage entitlements, making  efforts to stymie the current efforts on the European scene for a directive for such rights. Another front in that particular struggle has also opened up in the courts, where an important decision is awaited on collective bargaining rights.

But let’s pause for a moment and summarise what the government position actually is. Their thinking can be followed like so:- ‘we can’t return to the Social Partnership of the past because that lacked legitimacy and accountability – we don’t like the present social partnership-lite because it seems too tepid and shuts out too many voices – however we don’t want to give too much power to the unions legally – so let’s just intensify the existing dialogue structures we have’.

However, intensifying existing social dialogue structures alone would be a mistake. If policy-makers learn from the discoveries of the pandemic, great progress could be made for both workers’ interests and the rule of law.

 The Opportunities

The Irish Small to Medium Enterprise Association (ISME) didn’t like the old social partnership model. Part of their beef was with the membership – why were they not allowed in? Why did others get the chance to chat to power? Was it a case of elites only talking to other elites?

Tragically for ISME, they continue to mostly huff outside the social partnership cordon of power (Note the latest activities of LEEF in the childcare sphere). Some initiatives have been more broad-minded, such as the National Economic Dialogue, but its scope is limited: NED lasts for 2 days a year and exists primarily to discuss what might go into a pre-budget submission, not the actual budget, with the Chair in 2019 noting that the process did ‘not have identified clear priorities for Budget 2020 and could be viewed as having provided too much sectoral pleading and not enough discussion of the “national interest”.

But it’s not just ISME who remain outsiders. The pandemic has shown that there are a large number of un-unionised, unrepresented workers in Ireland who work in difficult conditions with few rights (think of the early outbreaks in meat factories). Who will speak directly on behalf on these people and convey their grievances?

Moreover, this point cuts both ways: the pandemic has also shown us enormously powerful non-statutory, ad hoc bodies who are deferred to and sometimes treated almost like another constitutional arm (for example, the recent deference to NIAC on the Johnson & Johnson vaccine), which has made others (read again: me) slightly queasy about the constitutional order.

Any re-thinking of a social dialogue model should radically consider who is in and who is out and the kinds of structures for dialogue we put in place. This kind of thinking will have to engage seriously with corporatism and how to emphasise its democratic nature. However, such an approach will have its pay-offs, consider the following example:-

Much has been made of the recent issue regarding religious worship and the movement restrictions, with some arguing that a rule of law violation has been committed by the government in stating that religious restrictions were banned when they weren’t. Indeed IHREC’s recent report pointed to a number of other similar violations, where the law and the government’s commands to the public were out of step.

Regardless of who is actually in the right about these issues, a social dialogue model which had engaged with those to whom these commands were spoken ahead of time might have saved costly litigation, clarified legislation before its promulgation, given a voice to all those affected, and ultimately achieved better compliance.

Such an approach may lead to some unpalatable dialogue - some might baulk at the idea of a minister and an archbishop pre-emptively discussing whether mass might be banned in another lockdown (as opposed to afterwards)– but such are the costs of seriously committing to liberal democracy, wherein many groups are to be given a voice. My point in this regard is that it’s easier to adopt an ex-ante approach of a partnership rather than the inefficient post hoc posture of a unilateral command – when everything is broken, people are angry, and court lists begin to fill up.

This is neither quixotic nor foolish: not foolish because pandemic measures rely on everyone’s constant compliance and so it is wise to make the people both the subjects (and not just the objects) of any measure through partnership and dialogue. It is not quixotic because it has been done elsewhere: social partnership in Austria quickly devised a comprehensive wage subsidy scheme, leading to praise for both its generosity and its maintenance of a relatively low unemployment rate (though there are important differences here, not least that corporatism has been alive and well in Austria since the guilds of the Holy Roman Empire, but I do not have the space right now to say why that’s not a huge problem).

This ghost of a crisis past may flicker away with the news cycle, but if the government is serious about reviving an idea of social partnership, then they first need to be radical about who they are going to talk to.

Jack Larkin is a graduate of Trinity College, Dublin and the London School of Economics. He is currently a Master’s in History candidate at the University of Oxford.

Suggested citation: Jack Larkin, ‘ The Ghost of Crisis Past - Social Partnership 2.0 (Pandemic patch)’ COVID-19 Law and Human Rights Observatory’ (4 May 2021) https://tcdlaw.blogspot.com/2021/05/the-ghost-of-crisis-past-social.html

Thursday, April 29, 2021

Grand Chamber of the European Court of Human Rights upholds compulsory vaccination

 

Mel Cousins, School of Social Work and Social Policy, Trinity College Dublin

 

Introduction

Given the current focus on COVID-19 vaccination both in Ireland and, indeed, across the globe, it is timely that the Grand Chamber of the ECtHR has given a ruling on the status of compulsory vaccination under the ECHR. Of course, this case involves different diseases and it has never been suggested that Ireland would adopt a policy of compulsory vaccination. Nonetheless, the approach of the Court may be instructive in relation to a number of ‘quasi-compulsory’ issues likely to arise such as vaccination passports.

 

The Facts

Vavřička v. Czech Republic (8 April 2021) involved challenges to a requirement that all children should be vaccinated against a range of diseases. Preschool facilities may only accept children who had received the required vaccinations, had been certified as having acquired immunity by other means, or as being unable to undergo vaccination on health grounds. Failure to comply with these requirements is a criminal offence punishable by a fine of up to c.€400.

 

The Ruling

The Grand Chamber considered the case under both Article 8 (right to respect for private and family life) and Article 9 (right to freedom of thought, conscience and religion). The Court readily accepted that compulsory vaccination represented an interference with the right to respect for private life under Article 8. It quickly found that, in the cases before it, this was in accordance with national law and in pursuance of a legitimate aim, i.e. to protect against diseases which may pose a serious risk to health.


The focus of the Court’s assessment was, therefore, on whether this was ‘necessary in a democratic society’. As the Court explained (at para 273).

 

An interference will be considered ‘necessary in a democratic society’ … if it answers a ‘pressing social need’ and, in particular, if the reasons adduced by the national authorities to justify it are ‘relevant and sufficient’ and if it is proportionate to the legitimate aim pursued.

 

The Court noted that there is a general European consensus that vaccination is one of the most successful and cost-effective health interventions and that States should aim to achieve the highest possible level of vaccination. At the same time, it noted a lack of consensus about how to achieve vaccination with a spectrum of policies, ranging from persuasion to a legal duty to vaccinate. The Court also emphasised the importance of social solidarity which aimed ‘to protect the health of all members of society, particularly those who are especially vulnerable with respect to certain diseases and on whose behalf the remainder of the population is asked to assume a minimum risk in the form of vaccination’ (at para 279). The Court recalled that healthcare policy matters come within the margin of appreciation of the national authorities and held that, having regard to the issues outlined, this margin should be a wide one.


As to whether there was a ‘pressing social need’ the Court noted that States are under a positive obligation under the Convention to take appropriate measures to protect the life and health of their people. It was satisfied that the vaccination duty represents the Czech authorities’ response to the pressing social need to protect individual and public health against the diseases involved and to guard against any downward trend in the rate of vaccination. The Court (at para 288) considered that


where the view is taken that a policy of voluntary vaccination is not sufficient to achieve and maintain herd immunity, … , domestic authorities may reasonably introduce a compulsory vaccination policy in order to achieve an appropriate level of protection against serious diseases.


Having considered the evidence, the Court accepted that the choice of the Czech legislature to apply a mandatory approach to vaccination was supported by relevant and sufficient reasons.


Turning to proportionality, the Court noted that while vaccination was mandatory in law there were exemptions and that there was no question of forcible vaccination. It further observed that the Czech courts had developed the possibility of a ‘secular objection of conscience’ and that there were procedural safeguards (e.g. administrative appeals and judicial remedies). It considered that the fines imposed were not excessive and noted that compensation was possible for any injuries to health caused by vaccination.


Finally, while the Court accepted that the exclusion of the children from preschool involved the loss of an important opportunity ‘to develop their personalities and to begin to acquire important social and learning skills in a formative pedagogical environment’, it observed the importance of a high level of vaccination amongst preschool children and that admission to national school was not, in contrast, affected by the law.


The Court, more shortly, dismissed the challenge under Article 9. Noting that none of the applicants had claimed religious objections, it concluded that any critical opinion on vaccination was ‘not such as to constitute a conviction or belief of sufficient cogency, seriousness, cohesion and importance to attract the guarantees of Article 9’ (Para 335). Accordingly, it did not need to consider whether there was an interference with freedom of conscience or (if so) whether this might be justified. 


Discussion

Thus the Court upheld compulsory vaccination in this context and helpfully set out the issues it will take into account in its assessment. It carried out a detailed assessment of proportionality (on the issues discussed above) although it was arguably inclined to accept a general consensus on the benefits of vaccination without any searching enquiry.


Of course, Ireland is one of the European countries which does not require compulsory vaccination of children and it has never been suggested that it would do so in a COVID-19 context. Nonetheless, issues are likely to arise in the coming months where, it might be argued, vaccination is being made quasi-compulsory. These include, for example, a possible requirement to have a ‘vaccination passport’ in order to travel (or even to attend certain events) or the suggestion that persons in certain employments might be required to be vaccinated. 


The first question (assuming that the rules are set out in law) would be whether the measure pursued a legitimate aim. In Vavřička, the issue was not just the policy of compulsory vaccination but also the fact that this led to denial of access to preschool. Arguably the Court, having accepted the general logic of vaccination, did not subject this specific requirement to a very searching assessment (at paras 305-308). A question may, therefore, arise as to whether it is the overall aim of vaccination which is to be assessed or the specific aim of individual measures, such as vaccination passports.


Second, the Court will look at whether there is a pressing social need and if the reasons advanced by the national authorities to justify it are relevant and sufficient. Finally, the Court will have regard to proportionality in relation to issue such as exemptions, procedural guarantees and the impact of any sanctions. A loss of employment, for example, might be considered to raise serious issues of proportionality (not to mention possible Constitutional issues). 


Mel Cousins is a visiting research fellow at the School of Social Work and Social Policy, Trinity College Dublin.


Suggested citation: Mel Cousins, ‘Grand Chamber of the European Court of Human Rights upholds compulsory vaccination’ COVID-19 Law and Human Rights Observatory’ (29 April 2021) https://tcdlaw.blogspot.com/2021/04/grand-chamber-of-european-court-of.html

Tuesday, April 27, 2021

Covid-19 and Political Economy: A New Economic Ideology for the European Union?

Hilary Hogan, European University Institute.


In the wake of the Second World War, most of Europe embraced the ideas of British economist John Maynard Keynes. Keynes argued that market forces were not well disposed towards self-regulation, nor were they inherently efficient or capable of preserving employment. These failings warranted ongoing state intervention in the form of taxation, public expenditure and borrowing. His work was revolutionary: governments would no longer be at the mercy of the boom-and-bust cycle of the free market. Instead, states could spend their way out of economic crises, by ramping up public expenditure to stimulate employment, and retreat during booms to cool the economy and allow the state to repay its borrowings.

 

But by the 1980s, Keynesianism had fallen out of fashion, overshadowed by the resurgence in support for economic liberalism – dubbed neoliberalism - championed by Thatcher and Reagan. During the negotiations for the 1992 Maastricht Treaty, which largely remains the foundation for the present-day European Union, other Member States recognised that a European monetary union was inconceivable without German support. Keynesianism had never been popular in Germany, where ordoliberalism had emerged as the dominant school of economic thought. Ordoliberalism is its own form of distinct thought within the neoliberal economic family. Ordoliberalism openly envisages a role for the state that involves the creation of competitive market through its institutions, including the legal system. Neoliberals, on the other hand, tend to argue that the market will reach natural competitive equilibrium if the state refrains from regulating – although it is often argued that this is somewhat of a fiction, and the implementation of neoliberalism requires just as much state intervention.

 

Ordoliberalism envisages a role for the state in the creation of competitive markets through its institutions, including the legal system. Monetary policy prioritises low inflation instead of employment, and an independent central bank ensures that the goal of achieving price stability is immune from political influence. It rejects Keynesian counter-cyclical economic policies, meaning that public deficits should always be kept at a minimum. While the EU is often described as neoliberal, the more accurate description is ordoliberal, as the Maastricht Treaty codified this distinct vision of German political economy. As the Treaties act as the de facto European constitution, the Maastricht Treaty transformed what had previously been  political and economic preferences into purportedly neutral, legally binding principles.

 

The Maastricht Treaty sets strict limits for government deficits and debt ratios, and largely constrains Member States from responding to economic downturns with Keynesian-style fiscal stimulus (tax cuts or public expenditure). The Maastricht Treaty excluded the EU or other Member States from assuming liability for another’s debt -  seemingly ruling out the possibility of an internal European Union bail-out. The new European Central Bank had one sole objective: maintaining low inflation. No matter how high the rate of unemployment, it would be, in theory, entirely irrelevant to the ECB.  Nor was the ECB empowered to act as a “lender of last resort” to Member States, a critical role tasked to central banks who can act to liquidise ailing governments when they can no longer borrow on the international markets. The ECB’s narrow mandate meant it had a strikingly myopic view of Europe’s economic problems that was to prove highly damaging in the wake of the 2008 Financial Crisis.

 

The end result? Europe established a partial monetary union, and defied every leading economists’ recommendation by choosing to leave out a fiscal union. The Member States had ceded control over monetary policy (interest rates) to an unaccountable ECB, which was fixated solely on the rate of inflation. They had established a single currency, meaning that diverse Member States would no longer be able to internally devalue their national currency to make themselves more competitive. Strict fiscal rules on the rate of public deficit meant that Keynesian economic policies were out of the question for ailing Member States: they could no longer spend their way to economic recovery. Nor could they rely on their European neighbours for assistance, as debt mutualisation or a central fund had been ruled out. Due to the ordoliberal ideology of the Maastricht Treaty, the only tool left for Member States who faced financial difficulty was austerity.

 

The Euro Crisis and Austerity

The combination of the single currency, the Euro, underpinned by a rigid ordoliberal ideology was to prove catastrophic for the European Union. When millions of Americans gradually began to default on their mortgage debt in early 2007, the global financial system began to unravel. It soon transpired that Europe had more banks than it needed, and its banks had taken even greater risks in an effort to stay profitable. The introduction of the single currency had also encouraged the widespread purchase of Eurozone sovereign debt bonds, seemingly under the mistaken belief by investors that all Eurozone government debt was equally risk-free. By contrast with its proactive American cousin, the Federal Reserve, which immediately took steps to boost confidence in the economy, the European Central Bank showed little sign of grasping the magnitude of the crisis it faced, or even that it had any role in remedying the situation. Its role in consolidating and worsening the crisis through its unyielding commitment to its underpinning economic ideology cannot be overstated.

 

While the ECB provided liquidity to European banks, it initially refused to countenance dramatically lowering interest rates in the way that the Federal Reserve had done and continued to be fixated with preserving low inflation by raising interest rates, which benefitted the German economy, but only made matters infinitely worse for the struggling debtor countries. Greece’s debt crisis could perhaps have been remedied early on by the ECB purchasing Greek debt. But instead, multiples bailout were agreed by the IMF and European leaders for Greek’s creditors, along with strict program of austerity: structural reform, tax increases and a dramatic reduction on public spending, amidst mounting protests from the Greek public. When Angela Merkel and Nicholas Sarkozy agreed that any new debt assumed by Member States would have conditions for early debt restructuring, requiring private creditors to bear most of the losses rather than the public taxpayer, the then President of the ECB, Jean Claude Trichet, persuaded Merkel to drop the plan.

 

When finally forced into action, the EU clung to the traditional right-wing solutions of ‘fiscal consolidation’ demonstrating the depth of its ordo-liberal commitments. Intense programs of austerity were also implemented in Ireland, Italy, Spain and Portugal. Austerity directly contradicts Keynesian economic response to recessions by radically reducing public expenditure to produce economic growth. Proponents of austerity (such as the IMF) argue that reducing government deficits inspires confidence, prompting greater private investment and resulting in economic recovery. But, as economist Joseph Stiglitz writes: “how this is happens has never been explained. Out in the real world, the confidence theory has been repeatedly tested and failed.”

 

The problems with austerity are well-documented: in order to create economic growth, there must be consumption. Economic uncertainty discourages investment. Wage cuts, redundancies and cutbacks to public services discourage spending; the natural instinct is for individuals to save. This produces a fall in demand for goods and services, and the economy contracts. The ‘structural reforms’ which accompany austerity in the name of ‘labour flexibility’ make it easier for workers to be dismissed, and incentivises the creation of insecure, low-wage employment. Austerity is not even good at doing what it is supposed to do: it is a highly ineffective means of tackling public debt, and it can take decades of redirected public money towards servicing debt repayments when economic growth through public expenditure, targeted tax on capital or a moderate rise in inflation would address the issue far more swiftly.


Austerity disproportionately harms those who rely most on public services: the lower middle classes, the working class, and the impoverished. Philip Boucher Hayes’s excellent documentary has recently brought renewed attention to the devastating human cost of austerity in this country. Austerity in many ways is a beguilingly simple idea. These Member States, the narrative went, had run out of money, and borrowing or spending during financial hardship was counter-intuitive. It is easy, when likening governments to households, to characterise spending during a recession as irresponsible. But there is a world of difference between macro-economic policy and personal financial management. Households do not have the internal capacity to lower their own interest rates, to buy their own debt or take any of the significant steps that a central governing body can do in response to recession. The language of ‘balancing books’ belongs to personal accountancy: states can and do run budget deficits, particularly during times of financial hardship.

 

Yet it was repeatedly stressed by European officials that there was no alternative to austerity, and that it was the sole means of tackling the Member State’s national debt.  Not only was that not true (as noted above, there are far better and more effective means of tackling public debt) but its premise was false. It created the impression in the minds of the public that the meltdown of the global system had been caused – or certainly contributed to by – excessive public spending by national governments. Generous welfare programs had not caused the global financial meltdown. The reason that countries such as Ireland and Spain had inflated deficits after 2008 was largely because they had shouldered the cost of bailing out the banking system.

 

The use of the term ‘sovereign debt crisis’ was a misnomer, it was, instead, a banking crisis that had been “generated by the private sector but [was] being paid for by the public sector” (Mark Blyth, Austerity: The History of A Dangerous Idea (Oxford University Press, 2013) p. 62). Even Eurozone countries which had no need to adopt austerity policies began to do so, and these “cascading effects caused other member state economies to slow down as well [and] pushed the eurozone into a collective economic downturn” (Ashoka Mody, Eurotragedy (Oxford University Press, 2018) p.286). All in all, the European Union took nearly six years longer than the United States to recover from the economic downturn.

 

Covid-19 and European Union

During the Euro Crisis, resistance to austerity was characterised a denial of reality; a failure to accept what was the only means of tackling the crisis. But it seems as though there has been a remarkable shift in thinking. Traditional advocates for austerity – such as the IMF – are now recommending government spending as the best means to tackle the consequences of the Covid-19 pandemic.

 

In March 2020, European Union fiscal lending rules were suspended entirely by the European Council, who invoked the general escape clause in the Stability and Growth Pact, noting that “flexibility” was needed through “discretionary stimulus” to cope with the economic fallout from the pandemic. The European Commission has recently suggested that this could last into 2022. Ordinarily, budgetary deficits cannot be greater than 3% of GDP or public debt larger than 60% of GDP. The 2011 Fiscal Compact Treaty further mandated Member States to avoid budget deficits by running a surplus or keeping their budgets balanced. Those rules have been abandoned, in favour of mass government spending through income supports for individuals and industries, and investment in public services, particularly health.

 

The transition is remarkable. The European Union is approaching the Covid-19 pandemic in a radically different way, accepting that spending – not austerity – is the best means of salvaging Europe’s economies from the wreckage of Covid-19. This is a welcome approach, not least because it seeks to buffer the European public from the worst of a crisis which was not of their making. According to Keynesian thinking, cutting tax rates or boosting public expenditure creates a ‘multiplier effect’ as individuals have more money to spend or invest, which stimulates economic recovery. 

 

The threat of raising income tax rates and curbing public spending to ‘pay for’ Covid would be misguided, not least when the government can benefit from record levels of cheap borrowing. Now is the time for the State to undertake major investment in areas such as housing, healthcare and education, and to make major inroads in tackling climate change. These investments will be particularly necessary to bridge divisions that the pandemic has sharpened. Many in the professional classes who can work from home have kept their income and have record levels of savings. By contrast, many small and medium sized businesses, the self-employed, those working in sectors such as hospitality, tourism, entertainment and retail have been financially devastated. These sectors are also more likely to employ young people, who were already struggling with a housing crisis and own a tiny fraction of this country’s wealth.

 

Even before the pandemic, economist Thomas Piketty was able to demonstrate in meticulous detail that the world was experiencing drastic levels of income inequality akin to a new Gilded Age. This has led to mounting awareness that the wealthy have simply not paid their fair share, aided by low corporate taxes and systems of tax havens. A major welcome development is US Treasury Secretary Janet Yellen’s plan for a global corporation tax - especially as targeted measures aimed at improving the fortunes of the bottom are far more likely to be spent and reinvested in the economy than tax breaks for the wealthy. Ireland will have to rethink its own approach to corporate taxation: Deputy Joe O’Brien’s suggestion for a once-off solidarity tax is strong start.

 

Economist David McWilliams wrote recently that there is a monetary revolution underway, as the Biden administration appears to be embarking on the kind of Keynesian fiscal stimulus not witnessed since Roosevelt’s New Deal. But there is also a European constitutional revolution underway. How do the European Union’s actions square with its founding document, the Maastricht Treaty? The answer is they do not. If its foundational economic principles are perpetually suspended during a crisis, it is a fairly damning acknowledgment that they are not fit for purpose.  Europe has implicitly abandoned ordoliberalism and its reliance on austerity and reached for the Keynesian handbook. We are witnessing a form of de facto constitutional change, an abandonment of the principles Europe claimed it could not budge from during the Euro Crisis. This suggests that the European Union is beginning to acknowledge what many have argued: its underpinning economic ideology does not work, at least not without inflicting immense human suffering. 

 

Hilary Hogan is a Ph.D. candidate at the European University Institute in Florence. Her research examines the link between economic liberalism and the rise of populism in the wake of the 2008 Financial Crisis.


Suggested citation: Hilary Hogan, ‘Covid-19 & New Economic Ideology for the European Union?’ COVID-19 Law and Human Rights Observatory Blog (27 April 2021) https://tcdlaw.blogspot.com/2021/04/covid-19-new-economic-ideology-for.html


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