Adjustment programmes, the European Central Bank and conditionality

Chapter 9 examines the adjustment programmes devised to support EU member states facing fiscal challenges, discussing also the role of the ECB in designing and monitoring such programmes. As the author explains, after losing accessing to the bond markets, five Eurozone countries - Greece, Portugal, Ireland, Cyprus and Spain - received financial assistance from the ESM and its predecessors. Nevertheless, pursuant to the principle of conditionality, financial support was subject to the national implementation of structural reforms, including in the pension, labour market and tax sectors. The author, in particular considers the case of Ireland as an example to assess the efficacy of the adjustment programmes and even though the Irish case is often taken as a success story, he emphasizes how the a number of the requirements originally set by the international creditors were actually lost in translation due to national political opposition. The author then reflects on the impact of adjustment programmes on the protection of social rights, and reviews the growing case law by national and European courts in this field, making the conclusive case that financial support programmes should give greater attention to the disparate social impact resulting from economic adjustment at the domestic level.