EHRM, 24-09-2015, nr. 13341/14

The applicant is a pensioner eligible to receive social-security benefits under the public-sector pension scheme. In 2009 she was granted a retirement pension which amounted to 1,980.72 euros (EUR) gross per month.

In April 2011 Portugal requested financial assistance from the European Union (EU), the euro area Member States and the International Monetary Fund (IMF). An Economic Adjustment Programme was negotiated in May 2011 between the Portuguese authorities and officials from the European Commission, the European Central Bank (ECB) and the IMF including a joint financing package of EUR 78,000,000,000 (EUR 26,000,000,000 from the European Financial Stabilisation Mechanism, EUR 26,000,000,000 from the European Financial Stability Facility and EUR 26,000,000,000 from the IMF). The programme was agreed and formally adopted on 17 May 2011 at a Eurogroup/ECOFIN meeting in Brussels, where the Portuguese Government signed a Memorandum of Understanding on Specific Economic Policy Conditionality (the ‘M.o.U.’) with the EU, the ECB and the IMF and thereafter two related documents: the Technical Memorandum of Understanding and the Loan Agreement.

The M.o.U. set out the economic and social policies, including tax and social-security measures, that Portugal should implement for the duration of the programme (2011–2014) in order to improve its financial situation and receive financial support from the EU. It stipulated, inter alia, that Portugal would:

On 31 December 2012 the Official Journal (Diário da República) published Law no. 66-B/2012 on the State budget (Lei do Orçamento de Estado para 2013, hereinafter ‘the 2013 State Budget Act’), which was designed to continue the implementation of the M.o.U. initiated by Law no. 64-B/2011 of 30 December 2011 on the 2012 State Budget. Pursuant to section 78 of the 2013 State Budget Act, the scope of application of the existing extraordinary solidarity contribution (contribuição extraordinária de solidariedade, hereinafter ‘the CES’) was extended in order to include pensioners receiving a gross amount of EUR 1,350. This provision was to apply in 2013 and only during that year.

The applicant's pension was subsequently taxed at 3.5% on a part corresponding to EUR 1,800 and 16% on the part exceeding it. The excess was EUR 180.72. The total amount deducted because of the CES thus amounted to EUR 91.92.

With the entry into force of the 2013 State Budget Act, the applicant's pension was reduced accordingly, resulting in a cumulative loss of EUR 1,286.88 in 2013. This loss amounted to 4.6% of the applicant's total annual social security benefits.

On 31 December 2013, the Official Journal published the 2014 State Budget Act (Law no. 83-C/2013), which reintroduced the CES for 2014 with the same threshold and rates as the ones applied under the 2013 State Budget Act. Consequently, the CES was again applied to the applicant's pension as provided for in section 76 of the 2014 State Budget Act.

On 14 March 2014 a law amending the 2014 State Budget Act entered into force (Law no. 13/2014). Pursuant to the amendments to section 76, the scope of application of the CES was extended to pensions of a gross amount of EUR 1,000, while the rates applied to larger pensions were increased. The rates applied to the applicant's pension remained unchanged.

In 2014 the applicant sustained a cumulative loss of EUR 1,286.88, amounting to 4.6% of her total annual pension payment.

In June 2014 Portugal exited the three-year Economic Adjustment Programme and is currently under post-programme surveillance until at least 75% of the financial assistance received has been repaid.

The relevant information with regard to the EU assessment of the 2011 economic situation in Portugal can be found in the case of Da Conceição Mateus and Santos Januário v. Portugal (dec.), nos. 62235/12 and 57725/12, § 11, 8 October 2013.

As part of the economic adjustment programme, the EU and the IMF organised regular review missions to Portugal in order to monitor the implementation of the M.o.U. signed between Portugal and the European Commission, the European Central Bank and the International Monetary Fund on 17 May 2011, and to assess the results of the reforms prepared by the Portuguese Government.

The relevant excerpts of the EU mission reports conducted in 2013 and 2014 read as follows:

In the applicant's case, the Court notes that the CES was provided for by the 2014 State Budget Act. Furthermore, the Court refers to the reasoning of the Constitutional Court in its rulings of 2013 and 2014 in which it considered that the CES, in general, was not unconstitutional and thus fulfilled the requirement of lawfulness.

The Court therefore concludes that the interference with the applicant's property rights was provided for by law, as required by Article 1 of Protocol No. 1 to the Convention.

Any interference by a public authority with the peaceful enjoyment of possessions can only be justified if it serves a legitimate public (or general) interest (see Broniowski v. Poland [GC], no. 31443/96, §§ 147-48, ECHR 2004-V, and Hutten-Czapska v. Poland [GC], no. 35014/97, §§ 163–164, ECHR 2006-VIII). In this connection, a wide margin of appreciation is usually allowed to the State under the Convention when it comes to general measures of economic and social policy. Because of their direct knowledge of their society and its needs, the national authorities are in principle better placed than the international judge to decide what is ‘in the public interest’ on social or economic grounds, and the Court will generally respect the legislature's policy choice unless it is ‘manifestly without reasonable foundation’ (see National & Provincial Building Society, Leeds Permanent Building Society and Yorkshire Building Society v. the United Kingdom, 23 October 1997, § 80, Reports of Judgments and Decisions 1997-VII, and Stec and Others v. the United Kingdom [GC], nos. 65731/01 and 65900/01, § 52, ECHR 2006-VI). This margin is even wider when the issues involve an assessment of the priorities as to the allocation of limited State resources (see Pentiacova and Others v. Moldova (dec.), no. 14462/03, ECHR 2005-I; Huc v. Romania and Germany (dec.), no. 7269/05, § 64, 1 December 2009; and Koufakis and Adedy v. Greece (dec.), nos. 57665/12 and 57657/12, § 31, 7 May 2013).

However, the margin of appreciation enjoyed by States in these particular fields is not unlimited. The Court must be satisfied that a ‘fair balance’ has been struck between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights. In particular, the Court must ascertain whether by reason of the State interference the person concerned had to bear a disproportionate and excessive burden (see Hutten-Czapska, cited above, § 167; Koufakis and Adedy, cited above, § 42).

In the present case, the Court notes that the introduction of the CES and the reapplication in 2012, 2013 and 2014, provided for in the respective State Budget Acts, was intended to reduce public spending and was part of a broader programme designed by the national authorities and their EU and IMF counterparts to allow Portugal to secure the necessary short-term liquidity for the State budget with a view to achieving medium-term economic recovery (see paragraphs 10–15 above).

As it recently did in similar circumstances relating to austerity measures adopted in Portugal (see Da Conceição Mateus and Santos Januário v. Portugal, cited above, § 26), the Court considers that the application of the CES to pensions provided for in the 2014 State Budget Act was clearly in the public interest within the meaning of Article 1 of Protocol No. 1 and was adopted in an extreme economic situation, as a transitory measure.

The Court must now assess whether a fair balance has been struck between the demands of the general interest of the community and the requirements of protection of the applicant's fundamental rights.

In the assessment of the proportionality of the measures taken by the State in respect of pension rights, an important consideration is whether the applicant's right to derive benefits from the social insurance scheme in question has been infringed in a manner which resulted in the impairment of the essence of this right. The nature of the benefit taken away — in particular, whether it originated in a special advantageous pension scheme available only to certain groups of persons — may also be taken into account. The assessment would vary depending on the particular circumstances of the case and the applicant's personal situation; while a total deprivation of entitlements resulting in the loss of means of subsistence would in principle amount to a violation of the right to property, the imposition of a reasonable and commensurate reduction would not (see Janković v. Croatia (dec.), no. 43440/98, ECHR 2000-X; Schwengel v. Germany (dec.), no. 52442/99, 2 March 2000; Lakićević and Others v. Montenegro and Serbia, nos. 27458/06, 37205/06, 37207/06 and 33604/07, §§ 62–63, 13 December 2011; Apostolakis v. Greece, no. 39574/07, §§ 41–42, 22 October 2009 ; Kjartan Ásmundsson, cited above, § 45; Valkov and Others, cited above, § 97 ; Maggio and Others v. Italy, nos. 46286/09, 52851/08, 53727/08, 54486/08 and 56001/08, § 63, 31 May 2011; and Frimu and 4 other applications v. Romania (dec.), no. 45312/11, §§ 42–48, 7 February 2012). In all these cases, the reductions were general measures intended to undo special privileges or to bring a special pension regime into a general one.

The Court notes the Portuguese Constitutional court's conclusion in its rulings of 2013 and 2014 that the CES was a proportional measure, in particular given its extraordinary and temporary nature (see paragraphs 17–20 above).

In this connection, in examining whether the appropriate balance was struck, the Court takes cognisance of the fact that the CES, and other austerity measures, were adopted against the background of an actual and unexpected budgetary crisis in Portugal. In this regard it further notes that the Portuguese Constitutional Court has delivered different rulings on the issue of social rights (see paragraph 21 above) in which it grounded its decisions on the principle of the ‘proviso of the possible’ (reserva do possível, known in German as the Vorbehalt des Möglichen), according to which a State cannot be forced to comply with its obligations in the framework of social rights if it does not possess the economic means to do so. In this context, the budgetary constraints on the implementation of social rights can be accepted as long as they are proportionate to the public aim pursued (see paragraphs 37–38 and 41–42 above) and do not reduce social rights' claims to purely symbolic sums (mutatis mutandis, Vistiņš and Perepjolkins, cited above, 129, 25 October 2012). The international recognition of the country's economic situation indicates that the present budgetary constraints constitute an imperative, which however did not reduce possessions originating in a statutory social right's claims to a level that deprives the right of its substance (see for cases of total deprivation of a social pension, Kjartan Ásmundsson, cited above § 44 and Moskal v. Poland, no. 10373/05, § 74, 15 September 2009, and for cases of ‘wholly insufficient’ social pension, Larioshina v. Russia (dec.), no. 56869/00, 23 April 2002; Kutepov and Anikeyenko v. Russia (dec.), no. 68029/01, § 62, 25 October 2005; Budina v. Russia (dec.), no. 45603/05, 18 June 2009, and Huc, cited above, § 59, 1 December 2009).

The Court then notes that the CES reduced the applicant's annual pension by EUR 1,286.88 (4.6% of her total annual social security benefits) in 2013 and in 2014, which amounted to a cumulative loss of EUR 2,573.56 in the two years combined. In addition, the CES was only applicable to her pension for a period of two years (2013–2014), on a year-by-year basis. The interference by section 76 of the 2014 State Budget Act with the applicant's right to peaceful enjoyment of her possessions was therefore limited both in time and in quantitative terms. The Court takes further note that the Portuguese Constitutional Court, in its analysis of the CES, considered that there were no other alternatives which could pursue the same public aims affecting the holders of social rights to a lesser degree (see paragraph 18 above). Moreover, since the legislature remained within the limits of its margin of appreciation, it is not for the Court to decide whether better alternative measures could have been envisaged in order to reduce the State budget deficit and overcome the financial crisis (see Da Conceição Mateus and Santos Januário, cited above, § 28). Thus, as regards the personal burden which the applicant sustained on account of the impugned measure in force in 2014, the Court notes that she did not suffer a substantial deprivation of income.

In the light of the aforementioned, and observing the overall public interests at stake in the respondent State at the material time, and given the limited extent and the temporary effect of the application of the CES to the applicant's pension, the Court finds that the impugned measure was proportional.

It follows that this complaint is manifestly ill-founded within the meaning of Article 35 § 3 and therefore inadmissible under Article 35 § 4 of the Convention.

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 24 September 2015.

André Wampach

Deputy Registrar

András Sajó

President