Friday

29th Mar 2024

Germany: No need to get rid of troika

  • The troika has become synonymous with austerity and opaque decision-making (Photo: Bundesregierung)

Germany has snubbed both EU commission chief Jean-Claude Juncker and Athens by saying it sees no need to put an end to the troika of international creditors in Greece.

The troika - comprising the European Commission, the European Central Bank and the International Monetary Fund - has become a synonym for austerity policies and non-transparent decision making for bailed-out countries.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Juncker pledged in his election programme to have it replaced by a "more democratically legitimate and accountable structure based around EU institutions with enhanced parliamentary control".

The European Parliament last year had also called for the replacement of the troika with an EU body. And the new Greek government has said it does not want to deal with the representatives from the troika.

But Berlin is refusing to consider a different body.

"The troika is basically an instrument allowing EU member states' programmes to be evaluated in the Eurogroup, giving a basis for decisions on how to deal with these programmes further," a spokeswoman for German chancellor Angela Merkel said Monday (2 February) in Berlin.

"From the point of view of the German government, there is no need to deviate from this established mechanism - evaluation by the troika and subsequent decisions on a political level," spokeswoman Christiane Wirtz said.

"Within the German government there is also no indication whatsoever that the EU commission should take distance from this established mechanism," she added.

EU commission spokesman Margaritis Schinas on Monday said there are currently no concrete plans to scrap the troika and said that any such move would have to be agreed by all 19 eurozone states. But he repeated Juncker's pledge made last year to replace it with a more EU-based body "in the future", without giving any timeline for it.

As for the Greek government's ideas on how to deal with the country's debt, Schinas said Juncker will discuss them wit Greek Prime Minister Alexis Tsipras on Wednesday in Brussels.

Berlin meanwhile is still in wait-and-see mode ahead of an EU summit next week. It is insisting that Greece has only been given until the end of February to strike a deal with its creditors - not May as Athens has been hoping for.

A spokeswoman for German finance minister Wolfgang Schaeuble said that her boss congratulated his new Greek counterpart, Yanis Varoufakis, but said no concrete date has yet been set for a meeting between the two.

Varoufakis was in London on Monday after a stop in Paris on Sunday as he seeks allies on giving Greece more time to sort out a deal.

In an interview with the Financial Times, Varoufakis backed down from the initial idea of 'debt forgiveness' and is now promoting a "menu of debt swaps", linking debt repayments to economic growth.

This idea is backed by the Bank of England, the IMF and Yale University. But investors are sceptical the scheme can work without "significant compensation", Reuters reports, quoting three debt brokers.

Greece flip-flops on troika talks

Greek finance minister Yanis Varoufakis has denied previous statements that Greece will no longer deal with the troika of international creditors following icy talks with the head of the Eurogroup.

End-of-troika debate amplifies ahead of Greek elections

A legal opinion by the EU top court and comments by the EU economics commissioner about the end of the bailout troika have come just days before elections in Greece, where troika-imposed austerity is a central issue.

Opinion

Why UK-EU defence and security deal may be difficult

Rather than assuming a pro-European Labour government in London will automatically open doors in Brussels, the Labour party needs to consider what it may be able to offer to incentivise EU leaders to factor the UK into their defence thinking.

Latest News

  1. Kenyan traders react angrily to proposed EU clothes ban
  2. Lawyer suing Frontex takes aim at 'antagonistic' judges
  3. Orban's Fidesz faces low-polling jitters ahead of EU election
  4. German bank freezes account of Jewish peace group
  5. EU Modernisation Fund: an open door for fossil gas in Romania
  6. 'Swiftly dial back' interest rates, ECB told
  7. Moscow's terror attack, security and Gaza
  8. Why UK-EU defence and security deal may be difficult

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us