Here follows a scenario and a number of inter-related questions, which those looking to write an exciting master thesis might find interesting. This post relates to an underexplored, though interesting issue of shared responsibility for injury caused by acts which can or not be considered as ‘wrongful’. After all, injury can be sustained by a State also from what on their face are perfectly lawful acts by other States.
While usually the starting point for the whole sequence of (shared) State responsibility starts with an internationally wrongful act and ends with the obligation of the State to make reparation for the injury caused, with the causal link in between wrongful conduct and injury sustained, let’s take the opposite example. For the sake of the argument let us say that before the whole debt crisis Greece was borrowing money from the financial market at a 5% interest rate. After the crisis and the downgrading of its sovereign debt rating Greece has to borrow money at a 10% interest rate. The injury for Greece in this case is the increase by 100% of the interest rate for the loans it takes. That is hardly a small change of circumstances for any State.
The question would then be, should the member States of the EU jointly share the responsibility for the injury in this case and contribute towards paying for the difference of 5% increase in interest rates? Can their delay in coming to a decision regarding the financial package relief for Greece be seen as a wrongful act, or at least as a decisive factor contributing to the economic damage sustained by this country? Can this delay and its repercussions be seen as a breach of the principle of solidarity among the EU member States? Could Greece make a claim before the European Court of Justice or another forum along these lines? Similar questions can be asked with regard to other countries of the Eurozone that are running into trouble because of their sovereign debts.
And a last related question is should credit rating agencies also be held responsible financially for taking action with regard to downgrading the sovereign debts of some countries at this particular moment? Did they know, or should they have known about these troubles and should they have moved to take action before? Is there a need for more or less regulation in this regard?
Lots of questions for diligent students to solve!