QUOTATION MARKS:
With the above decision, the Plenary of the Council of State decided a compensation action, which was brought before the Administrative Court of First Instance of Athens by a pensioner against I.K.A. – E.T.A.M. (main pension) and of ETEA (subsidiary pension). With her lawsuit, the plaintiff requested: a) that the said insurance organizations be required to pay her the total amount of 13,616.20 euros, with legal interest, which corresponds to the amount by which, as detailed in the lawsuit, the pensions awarded to her by the above insurance agencies (main and auxiliary), pursuant to i) of article three, paragraph 10 of the law 3845/2010, ii) of article 44 paragraph 13 of law 3986/2011, iii) of article 2 paragraph 3 of law 4024/2011, iv) of article 6 paragraph 2 of law 4051/2012 and v) of article one paragraph IA subpara. IA.5 par. 1 and subpar. IA.6 para. 3 of Law 4093/2012 and b) to restore her pension to the amount determined by the corresponding award acts.
The above action was brought to the Plenary Session of the Council of State in accordance with the provisions of paragraph 1 of article 1 of Law 3900/2010 (A' 213), as replaced by Article 40 par. 1 of Law 4055/2012 (A' 51), because it raises a question of general interest that has consequences for a wider circle of persons. In particular, the lawsuit in question was brought to the Council of State in order to decide the issue of constitutionality of general interest, in relation to articles 2 par. 1, 4 par. 5 and 25 par. 1 and 4 of the Constitution, as well as the agreement with the European Convention on Human Rights of the provisions, with which there were successive cuts to the main and auxiliary pension of the plaintiff.
Also according to paragraph 1 of article 1 of Law 3900/2010, the decision of the Council of State issued during this procedure binds the parties to the trial, including the interveners.
THE CRITICAL DECISION OF THE WHOLE MEETING OF THE COUNCIL OF THE TERRITORY:
In this crucial decision (2287/2015), the Council of State analyzes the content of the social security right, as defined in article 22 par. 5 of the Constitution. He notes that the institution of social security aims to protect the insured against the occurrence of risks (old age, illness, disability) which negate his ability to work. The institution of social security must ensure a satisfactory standard of living for the insured, as close as possible to what he has achieved during his working life. It is also emphasized that beyond the above public purpose, through the institution of social insurance, social solidarity is manifested – as well as through social welfare – and social policy is practiced, in particular, redistribution of income with the aim of mitigating social contradictions and inequalities. In this context, the direct ratio (pure reciprocity) between contributions and benefits is not constitutionally enshrined in social security (StE 3487/2008 Coll. et al.), and the establishment of a maximum benefit limit, the granting of a pension in the event of a work accident regardless of the payment of contributions or the non-granting of a pension, despite the payment of contributions, are permitted in the event non-establishment of the insurance right.
The Council then considers that in the event of exceptional fiscal crises, the legislator may in principle establish rules and measures for the sustainability of the social security system, including pension cuts. Even in these exceptional cases, however, the legislator's ability to cut insurance benefits is not unlimited, but is primarily limited by the principles of social solidarity (Article 25 par. 4 of the Constitution) and equality in public burdens (Article 4 par. 5 of the Constitution), which mandate that the burden of fiscal adjustment be distributed equally among all citizens, as well as from the principle of proportionality (article 25 par. 1 of the Constitution), according to which the specific measure must be really appropriate and necessary to deal with the problem (cf. STE 2192-2196/2014 Coll.). In any case, the reduction of pensions cannot violate what constitutes, according to the above, the constitutional core of the social security right, i.e. the grant to the pensioner of such benefits as allow him to live with dignity, ensuring the conditions not only of his physical existence (food, clothing, housing, basic household goods, heating, hygiene and medical care of all levels), but also of participation in social life in a way that does not, however, substantially detach from the corresponding conditions of his working life (cf. decision of the Federal Constitutional Court of Germany of 9.2.2010,-1 BvL 1/09-,-1 BvL 3/09-,-1 BvL 4/09-, especially Rn.135).
Then the Council presents in detail and analyzes all the provisions of the memorandum laws by which the cuts in the main and auxiliary pensions as well as the gifts of holidays (Christmas-Easter) and leave were implemented. And in particular, it mentions the provisions of Law 3845/2010 "Measures for the implementation of the support mechanism for the Greek economy by the member states of the Euro Zone and the International Monetary Fund" (Α΄ 65/6.5.2010), in the third article of which the first measures regarding the reduction of pensions were included. This was followed by Law 3863/2010 entitled "New Insurance System and related provisions, regulations on labor relations" (Α΄ 115/15.7.2010), which, among other things, introduced the concept of the basic pension and the proportional pension, as well as imposed the Pensioners' Solidarity Contribution (EAS), which is kept in an account with financial and accounting independence, to the Generation Solidarity Insurance Fund (AKAGE) which was established with the provisions of article 149 of Law 3655/2008 (Government Gazette 58 A'). Subsequently, Law 3985/2011 entitled "Medium-term Fiscal Strategy Framework 2012-2015" (Α΄ 151/1.7.2011) was enacted, following the fiscal management standards introduced by Law 3871/2010. According to the explanatory statement of this law, which is merely formal, simulating a multi-year budget, the Medium-term Framework of Fiscal Strategy (M.P.D.S.) is "a key element of a different philosophy in the management of public resources and the first step for the transition to multi-annual budgets, as it contributes to the consolidation of the concept of multi-year planning of public finances". The interventions foreseen in Law 3985/2011 in the context of the second package of measures for the sustainability of the insurance system were carried out with Law 3986/2011 entitled "Urgent Measures for the Implementation of the Medium-Term Framework of the Fiscal Strategy 2012-2015" (Α΄ 152/1.7.2011), which further imposed cuts in pensions and increased the withholding rate of the Pensioner Solidarity Contribution (EAS). Because, the next reduction in the main and auxiliary pensions came with Law 4024/2011 "Pension arrangements, unified salary-grade list, labor reserve and other provisions for the implementation of the medium-term fiscal strategy framework 2012-2015" (Α΄ 226/27.10.2011).
Subsequently, with Law 4046/2012 (A' 28/14.2.2012) the Draft Financial Facility Agreements between the European Financial Stability Facility (EFSF), the Hellenic Republic and the Bank of Greece were approved, on the one hand, and the Draft Memorandum of Understanding between the Hellenic Republic, on the other hand, of the European Commission and the Bank of Greece. In particular, the above Memorandum of Understanding, a draft of which is attached as Annex V to the law in question, includes, among other things, the Memorandum of Economic and Financial Policy (Annex V.1), in which, among other things, the following are mentioned: "… Economic Policies A. Fiscal Policy … 5. … 6. In order to ensure the course of fiscal adjustment of the program, the government will undertake bold structural reforms on the expenditure side. Given the projected recovery path, Greece's continued problems with tax compliance …, additional measures will be required beyond those already approved … Most of the adjustment will be achieved through spending cuts aimed at permanently reducing the size of the state … Many of these cuts should be in social transfers, … 7. Key reforms, …, include [the following]: … Pension reform. Given the high share of pensions in Greek government spending, the large remaining fiscal adjustment will necessarily include further pension adjustments. We will do this in a way that protects low-income pensioners. As initial measures, to generate savings of €300 million in 2012 we will adopt a draft law to reform supplementary pensions, and we will … E. Structural Reforms … We will introduce legislation to reduce employers' social security contributions to the IKA by 5 percentage points and take measures to ensure that this reduction will not have a fiscal impact. Contributions will be reduced only when the necessary measures have been taken to cover the reductions in revenue…”. Subsequently, four months after the pension cuts established by Article 2 of Law 4024/2011, Law 4051/2012 entitled "Regulations of pension content and other urgent arrangements for the implementation of the Memorandum of Understanding of Law 4046/2012" (A΄ 40/29.2.2012) provided for new cuts pensions in article 6. And finally with article one paragraph IA of law 4093/2012, "Approval of the Medium-term Fiscal Strategy Framework 2013-2016 – Urgent Implementation Measures of law 4046/2012 and the Medium-term Fiscal Strategy Framework 2013-2016" (A' 222/12.11.2012), as the last paragraph of par. 1 of this article was replaced by article 34 par. 4 of Law 4111/2013 (Α΄ 18, 25.1.2013) with entry into force – according to article 49 par. 4 of the same law – from 5.12.2012, new cuts and reductions in pensions were established and imposed. Then the Council judges also in relation to the auxiliary funds that these (T.E.A.M., E.T.E.A.M., ETAT, E.T.E.A.) were established as mandatory social insurance bodies and in the form of N.P.D.D. (recital 19 of the decision).
In addition to the cuts in their main and auxiliary pensions mentioned in the previous considerations, the pensioners of the mandatory main and auxiliary insurance bodies were simultaneously subjected to all the general economic and fiscal measures taken to deal with the country's fiscal problem, and such measures were, among others, the gradual reduction of the tax-free threshold, the limitation of the levels and the increase of income tax rates (Articles 27 of Law 3986/2011, Article 1 et seq. of Law 3842/2010, 38 of Law 4024/2011 etc.), the imposition of a special solidarity levy (Article 29 of Law 3986/2011), the successive increase in value added tax rates, the inclusion in the increased rates of goods and services that were subject to a lower scale and the increase in excise taxes (Articles 12 et seq. of Law 3833/2010, 34 of Law 3986/2011 etc.), the equalization of heating oil and motor oil tax (Article 36 of Law 3986/2011), as well as corresponding interventions in real estate taxation property with a reduction, also, of the tax-free limit and an increase of the tax rates of the immovable property tax and imposition of the special tax on electrified persons (articles 33 of Law 3986/2011, 53 of Law 4021/2011 et seq.).
Moreover, pursuant to Law 4050/2012 (A΄ 36/23.2.2012), the 5/24.2012 Act of the Council of Ministers (A΄ 37/24.2.2012) was issued, by which bonds and other debt securities of the Greek State were subject to the "eligible securities modification procedure" (PSI), and the 10/9.3.2012 Act of the Council of Ministers (Α΄ 50/9.3.2012), by which, following the aforementioned procedure, the above securities were replaced with others of reduced value and longer maturity, as stated in the 2/2232/0023/8.2.2013 document of the Ministry of Finance to the Council of State, known to the Court from previous trials (see St. 3009, 3010/2014 All etc.), the value of the above new securities was determined through an auction at 21.5% of the nominal value of the original ones. Among the securities of the Greek State, which underwent the aforementioned "amendment", are also included the securities in which the Bank of Greece invested an amount of 16,370,961,274.34 euros of which, according to article 15 par. 11 of Law 2469/1997 (A' 38), "Common Capital", which included the available funds of the insurance of funds that had been transferred, by virtue of article three par. 1 of Law 2216/1994 (A' 83), to the Bank of Greece (see State Government 3724/2014 Vol. sc. 19).
Subsequently and in accordance with the previous considerations, the Council decided that these cuts and reductions, which started with the holiday and holiday allowances of the main insurance organizations (Article three par. 10-14 of Law 3845/2010), and continued in a short period of time with the solidarity contribution of the pensioners of the main insurance (Article 38 of Law 3863/2010), the subsequent adjustment and supplementing of this contribution and its extension to supplementary insurance (Article 44 par. 10-13 of Law 3986/2011), as well as the reductions in the pensions of under-55 pensioners and in the main and supplementary pensions that exceed, respectively, 1200 and 150 euros (Article 2 par. 1-5 of Law 4024/2011), are included in the packages of measures that are based on the provisions of the first "Memorandum" and the first "Medium-term Framework", and they constitute, according to the extrapolations, "immediate performance" measures to find resources to deal with the emergency in which the country found itself. With these data, the cuts in question, having been decided under the pressure of the above exceptional circumstances, and imposed at the discretion of the legislator for the immediate response to the crisis, do not violate the aforementioned constitutional provisions.
After the successive cuts and reductions mentioned above, and subsequently and in order to implement the second "Memorandum of Understanding" approved in 2012 (law 4046/2012), two more pieces of legislation followed, according to the above, in the same year, with the object of further reducing main and auxiliary pensions: Law 4051/2012, with article 6 of which were retroactively reduced by 12%, as detailed above, the main pensions that exceed 1,300 euros and the auxiliary pensions, with escalation of the reduction rate (10%, 15% and 20%) depending on their amount and with a reservation of a minimum limit of 200 euros, as well as Law 4093/2012, with its first article which, on the one hand, pensions from any source and for any reason, which cumulatively exceed 1,000 euros, were reduced again, in percentages from 5% to 20%, on the other hand, Christmas, Easter and holiday allowances and gifts were no longer abolished for all pensioners. In the explanatory reports of the provisions in question, as has been exposed, the previous cuts are not mentioned at all, and the adoption of the new measures is justified with a general reference to the "fiscal needs of the country", the "adverse financial situation of specific insurance entities" and the need "to ensure the viability of all social security entities…". In the above, on the other hand, the second Memorandum provided in this regard, according to what has already been explained, that for "the course of fiscal adjustment of the program" and in view of "Greece's continuous problems with tax compliance", it would be necessary to take "additional measures", that "the greater part of the adjustment would be achieved through spending cuts aimed at permanently reducing the size of the state", that "many of these cuts should concern social transfers", and that "the large remaining fiscal adjustment would necessarily have to include further pension adjustments … in a way that protects the low-pensioners …" (Review 23 of the decision).
Because the above provisions were passed when two years had passed since the first surprise of the economic crisis and after the basic measures to deal with it had been planned and taken in the meantime. Therefore, in the attempted new, for the umpteenth time, reduction of pension benefits of the same group of affected persons with these provisions, the legislator was no longer justified in proceeding with relevant regulations without a special investigation of their subject, but should, in accordance with the seventh paragraph, carry out a thorough study, in order to establish and show documented that the taking of the specific measures was compatible with the relevant constitutional commitments, those arising, among others, from the institution of social security, the principles of equality and proportionality and the protection of human value. In particular, in the context of this study, the legislator should, first of all, have made a comprehensive assessment of the factors that caused the problem that is invoked in terms of the viability of the insurance organizations (and, in fact, of each one of them, in view of its administrative and financial independence), and, in view of these factors – such as the reduction in the value, through the PSI (n. 4050/2012), of the available funds of the organizations in question, according to what was stated in the twentieth paragraph, mainly, the prolonged recession and the consequent increase in unemployment, to which the drop in the standard of living of large categories of the population as a result of measures corresponding to the disputes (reductions in pensions and wages) or tax burdens or tax burdens contributes significantly – to judge the appropriateness of these disputed measures. And this in view of his finding that the corresponding measures he had taken until then (reductions in pensions and salaries) had not yielded the expected results and that the economic recession had intensified at rates that had overturned the initial forecasts. Even if the contested measures were deemed appropriate, according to the above, the legislator had to further study and give a reasoned decision on their necessity, examining the existence of any alternative options and comparing the benefits and disadvantages of each for the intended public purposes (fiscal adjustment, viability of insurance organizations, ensuring a satisfactory, according to Article 22 par. 5 Comp., standard of living of the insured). Finally, if, in any case, following the above, the legislator chose, as in this case, to make specific cuts in pensions (a choice, in principle, judicially unreviewable), he should have previously examined in a scientific and judicially verifiable manner, whether the effects of these cuts on the living standards of those affected, added to the effects of the already taken general measures to deal with the crisis (such as consecutive tax burdens) and combined with the broader socio-economic conditions of the current emergency period (cost of goods and services, cuts in health benefits, unemployment and its effect on family income, extent and content of debt obligations), lead to an impermissible reduction in the standard of living of pensioners below the threshold that constitutes, as stated, the core of their social security right. However, it does not appear from any evidence that such a study took place in this case with regard to the above issues. In addition to this, it does not appear that the crucial constitutional parameters mentioned above (seventh paragraph) were taken into account. Because, as can be deduced from the relevant preparatory work, the only criterion for the adoption of the relevant measures was their contribution to the reduction of public expenditure and "fiscal adjustment". Even the reference to the "adverse financial situation" of the insurance organizations, as the root cause of the problem, is made vaguely, either for all the organizations arrested, or for some unnamed ones, without specifically assessing the situation of each of them (in view of their financial independence and the imposed, accordingly, differences) and without mentioning whether and how the State contributed, in accordance with its constitutional obligation, to ensuring the their sustainability. After all, contrary to what is stated in the seventh paragraph regarding the obligations of the State for social security, the disputed legislative regulations are governed by the constitutionally unacceptable concept, under the "new insurance system", that the State simply regulates and organizes social security without being obliged to participate in the financing of social security organizations or that this obligation can be compensated with benefits of a welfare nature, as well as that the guarantee of viability of said organizations rests with the insured themselves, depending, in advance or even exclusively, on the mathematical relationship between contributions paid and benefits granted.
Following this, the above provisions of Laws 4051 and 4093/2012 contradict the aforementioned constitutional provisions and are, therefore, invalid and inapplicable, and the opposition of these provisions to the Constitution concerns the cuts not only of the main but also of the auxiliary pensions. Because the mandatory nature of the supplementary social security, which is provided by ETEA. and other bodies and, as a consequence, their operation as legal entities of public law (AED 87/1997, StE 5024/1987 Coll., etc.) are justified by the public purpose, which these bodies serve according to article 22 par. 5 of the Constitution, by contributing – by granting supplementary benefits in relation to those granted by the mandatory main bodies insurance – to ensure for pensioners a satisfactory standard of living, as close as possible to that which they had during their working life. In view of the aforementioned public purpose, the state, regardless of whether regular state funding of the compulsory supplementary social security bodies has not been foreseen to date, is obliged, however, according to the above constitutional provision, to participate in the financing of these bodies as well, in order to cover their deficits. Under the circumstances, after all, these, with the said provisions of the above laws, the fair balance between the general interest and the property rights of the pensioners is shaken and, therefore, Article 1 of the First Additional Protocol of the ECHR is also violated (Opinion 24).
Finally, in accordance with the provisions of article 50 of the p.d. 18/1989, as amended by article 22 par. 1 of law 4274/2014 (A΄ 147), which added par. 3b as follows: "In the event of a request for annulment directed against an administrative act, the court, weighing the actual situations that have arisen at the time of its implementation, especially in favor of bona fide administrators, as well as the public interest, may define that the results of the annulment refer to a point in time later than the time of its entry into force and in any case earlier than the time of publication of the decision…". In this case, according to the above, the diagnosis of the unconstitutionality of the provisions of article 6 par. 2 of Law 4051/2012 and article one par. IA subpar. IA.5 par. 1 and subpar. IA.6 para. 3 of Law 4093/2012 would entail the obligation of the Administration to comply with retroactive payment of the pension benefits that were cut, based on these unconstitutional provisions, not only to the plaintiff, but also to a particularly wide circle of persons concerned by this standard trial. In view of these facts, the Court, after weighing the public interest, referring to the exacerbated fiscal crisis and the commonly known financial difficulties of the Greek State, stipulates that the consequences of the unconstitutionality of the disputed provisions will occur after the publication of this decision. It is understood here that for the plaintiffs and those others who have exercised remedies or remedies up to the time of publication of the decision, the diagnosed unconstitutionality will be retroactive. Consequently, the unconstitutionality of these provisions cannot be invoked to establish compensation claims of other pensioners, regarding their pension benefits cut, based on the provisions in question, for periods of time prior to the date of publication of this decision.
The Plenary of the Council of State ruled on the above with decision no. 2287/2015 and referred the pensioner's compensation claim for further judgment, as to its admissibility and validity, to the Administrative Court of First Instance of Athens.
COMPENSATION PROCEEDINGS BEFORE THE SUBSTANTIVE ADMINISTRATIVE COURTS
Since the publication of the above decision (June 10, 2015) until today, more decisions of the administrative courts of substance have been issued, which accept lawsuits for pensioners' compensation and award the requested sums of money against the social security organizations.
These lawsuits have a legal basis for the unconstitutionality of the above provisions of laws 4051 and 4093/2012, which was diagnosed with the decision no. (p.d. 456/1984, Official Gazette A΄164). In particular, in article 105 of the Ins.N.A.K. it is defined "For illegal acts or omissions of the State bodies in the exercise of the public authority assigned to them, the State is liable for compensation, unless the act or omission was in violation of a provision that exists for the sake of the general interest" and in article 106 that: "The provisions of the two previous articles 104 and 105 are also applied to the liability of municipalities, communities or other legal persons under public law from actions or omissions of the bodies that are in their service". In the sense of the provision of article 105 of the Civil Code, in order to establish the responsibility of the State for compensation due to an act or omission of its organs in the exercise of the public authority assigned to them, it is required, among other things, that the act or omission be illegal. ). Moreover, according to article 932 of the Civil Code, which applies accordingly and on the responsibility of the State or n.p.d.d. according to articles 105-106 of the Ins.N.A.K. (StE 624/2016, 3312/2009, 1042, 1915/2007, 1410/2006 7m., 2796/2006 7m., 3256, 3696/2006), on tort, regardless of the compensation for the property damage, the court of substance can award reasonable monetary satisfaction due to moral damage, after an assessment of the facts and based on the rules of common experience and logic (StE 3329/2014, 1405/2013, 3218/2009, 330/2009, 2521/2008, 1019/2008, 2736, 2739/2007, 521, 2579/2006, 2727, 2320, 3457/2003, 2643/1998).
The administrative court of first instance in whose district the authority from illegal acts of the bodies whose pension was cut (main or auxiliary) of the pensioner is based.
Important among the decisions that vindicated pensioners is decision No. 3037/2018 of the Administrative Court of First Instance of Thessaloniki. With its decision, the court ruled in relation to the provision of the decision of the Council of State that "the unconstitutionality of these provisions cannot be invoked to establish the compensation claims of other pensioners, concerning their pension benefits cut, based on the provisions in question, for periods of time prior to the publication of this decision, the following: "The person responsible for adjudicating the lawsuit a court, when there is no res judicata, incidentally judges the constitutionality or compatibility of the formal law or regulatory administrative act, in which the harmful act or omission is based (cf. State of the Union 2080/2016, 4376/2013, 2620/2008, 502/2007 etc.), without there being a provision of the Constitution or the law, which excludes this control, which belongs to the core of the judicial function of the judge. Because, furthermore, every judge of the Greek legal order is entitled and obliged as a natural judge to exercise, in addition to the review of the constitutionality of laws, in accordance with article 93 par.4 of the Constitution, and the review of their compatibility with the provisions of international conventions, which have a higher validity than common formal and substantive laws, in accordance with article 28 of the Constitution. These two audits, being diffused, are exercised separately within the same jurisdiction, as they have a different audit rule and different legal foundations (cf. StE 302/2005, 169/2010, sc.10). In the context of the compatibility check, the common judge has the authority, on the one hand, to leave inapplicable any provision of the law that contradicts the E.S.D.A. or in another international convention sanctioned by law, even if (the provision) this is not contrary to the Constitution (Conseil Constitutionnel, 2010 -65 DC, 12 May 2010, s.13) or the claim of its unconstitutionality cannot be admissible by the party before the trial court, due to the postponement of the time of commencement of its invalidity in the context of the control of of its constitutionality formulated by a supreme court (cf. Conseil d'etat, N° 316734, May 13, 2011), and on the one hand to award compensation in the event that the non-conventional legislation resulted in damage to the property rights of the person, as was accepted in detail in paragraph 7 hereof". With this legal foundation, the Administrative Court of First Instance of Thessaloniki overcame the above provision of the decision of the Council of State, according to which pensioners' compensation claims prior to June 10, 2015 cannot be established.
Furthermore, the aforementioned decision ruled that the pensioners' compensation claims are time-barred in five (5) years in accordance with article 40 par. 6 of the a.n. 1846/1951, applicable accordingly. The above-mentioned five-year statute of limitations begins in this case, according to the rule of article 251 of the Civil Code, which is applied accordingly, from the time when the relevant claim of the pensioner arose and it was possible to pursue it in court, that is, as a rule, from the day of payment of his pension (cf. STE 2166/2015, 1327/2009). This decision ruled that it is also necessary to serve the lawsuit on the defendant to interrupt the statute of limitations and that the IKA owes interest of 6% per year from the service of the lawsuit.
In conclusion, it can be said that in order to claim the cuts suffered by pensioners by virtue of the above provisions that were deemed unconstitutional by decision 2287/2015 of the Plenary of the Council of State, it is necessary to file a compensation claim.