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“States have obligations to take steps to the maximum of their available resources to ensure the respect, protection and fulfilment of rights”, said the UN Special Rapporteur on extreme poverty and human rights, Magdalena Sepúlveda. “This includes making certain that adequate resources are raised and used for the realisation of the human rights of persons living in poverty.” “Therefore”, she said, “States must protect budgetary resources from being compromised by future bailouts and commit to creating a regulatory framework that ensures such resources are not directed to failing financial firms".
From 2008 to 2011, according to a news release from the Office of the UN High Commissioner for Human Rights (OHCHR), European countries committed €4.5 trillion – equivalent to 37 per cent of EU economic output – in rescuing their financial institutions. “Such levels of extra and unforeseen spending have pushed governments into debt sustainability crises and, in many cases, created unbearable hardship for citizens, especially people living in poverty, through austerity plans which have often contradicted States’ legal obligations to realize economic, social and cultural rights”, Ms Sepúlveda said.
UN Independent Expert on foreign debt and human rights, Cephas Lumina,... noted that “while it is widely accepted that the current eurozone sovereign debt crisis is largely a consequence of huge banking system bailouts, other financial sector actors, such as credit rating agencies, financial speculators and hedge funds, have played a central role in fueling the crisis". In his view, “it is important that proposed regulatory reforms are not exclusively focused on the banking system but extend to other financial sector actors".
The Independent Expert on the promotion of a democratic and equitable international order, Alfred de Zayas, expressed concern at “the tendency in EU countries to fail to address the root causes of the problem and merely resort to so-called austerity measures that compromise not only the welfare of the population today, but also that of future generations"... "It is imperative to avoid future undemocratic bailouts and set up a regulatory framework for the banking system – one that actually works”, Mr de Zayas emphasised.
Without mechanisms to avoid disruption to vital banking activities while restructuring or dissolving collapsing financial firms, some bailouts could again be necessary in the future, creating further negative impacts on human rights, the independent experts warned.