“The Time of the Troika” Is Finished, Say European Parliamentarians Heading Investigative Group

 

A special delegation of Members of the European Parliament (MEPs) from the Economic and Monetary Affairs Committee (ECON), tasked with investigating the EU Commission-European Central Bank-International Monetary Fund Troika, and with co-rapporteurs Othmar Karas (Austria, EPP Group) and Liem Hoang Ngoc (France, S&D group), on Jan. 16 released its Dec. 17, 2013 draft report. They have held hearings, and visited four of the countries affected by the Troika’s policies—Ireland, Portugal, Cyprus, and most recently Greece on Jan. 29-30. They wanted to find out how austerity policies have affected countries that had requested the EU’s help in dealing with their financial problems, according to the various EU reports.

According to Eurostats, Greek public debt averaged just under 104% of its Gross Domestic Product (GDP) during 1994-2009 and reached 148.3% in 2010, the year when Greece asked the EU for help. However, austerity seems to have made the situation worse. The European Commission estimates Greek public debt to have reached 176.2% of GDP in 2013, and forecasts it to fall to 170.9% in 2015. According to Eurostat, the Greek economy has shrunk for six years in a row. Unemployment is expected to remain at around 25% for the next couple of years. When Greece asked for help in 2010, it was only 12.6%.

Speaking from Athens on Thursday, European Parliament Vice President Karas criticized the way the Troika imposed austerity, and underlined “the need for more democracy.” “The Troika is a product of the crisis, an interim solution; a new instrument to help these countries and create solidarity in Europe has to be found,” said Karas.

Criticizing the political repercussions of the austerity measures imposed “without any legal basis” and “without any democratic debate,” French MEP Liem Hoang Ngoc blasted the Troika’s “lack of legitimacy and transparency.” “The EU Commission has no mandate to impose economic policies by pointing a gun on their head,” said Hoang Ngoc.

“The time of the Troika is finished; it has to be dismantled and replaced by a democratically controlled mechanism,” said Hoang Ngoc, who is the co-rapporteur on ECON’s task force on the Troika. “Today, the action of the Troika is overall negative…. A debt restructuring would allow Greece to have more maneuvering room,” he concluded.

While members of the task force disagree with each other, their final report will be published in March, subject to debate, and will be voted on by the European Parliament in April.

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