Saturday

17th Aug 2019

Troika concludes Greek mission, warning more austerity needed in 2013

Inspectors from the so-called troika of the European Commission, the European Central Bank and the International Monetary Fund have finally completed their mission to Athens, broadly giving Greece a passing grade that will likely allow eurozone ministers and the IMF to release €8 billion in bail-out cash to the embattled republic.

The government has achieved “a major reduction in the deficit since the start of the [bail-out] programme despite a deep recession,” the troika mission on Tuesday afternoon said in a statement, but added that the targets imposed by the international lenders will not be reached this year.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • The mission statement acknowledged that the recession in Greece will be deeper than expected (Photo: John D. Carnessiotis, Athens, Greece)

The mission said that the failure to meet these goals was a result of a drop in GDP but also “because of slippages in the implementation of some of the agreed measures” by the government.

The troika gave its blessing to recently announced austerity and adjustment measures, saying that they should be sufficient to bring the country’s deficit targets back on track “in combination with a determined implementation” of mid-term fiscal consolidation plans.

However, the inspectors said “additional measures are likely to be needed” from 2013-14, and that such measures should be adopted by the middle of next year.

They said that they have now reached a “staff-level” agreement with the Greek authorities on what future policies need to be implemented. The accord must still however be approved by eurozone ministers and the IMF.

The mission statement acknowledged that the recession in the country will be “deeper than was anticipated in June and a recovery is now expected only from 2013 onwards.”

There remains no evidence of an increase in investment by enterprise in the country, a state of affairs that the troika blame on the government’s tardiness in implementing EU-IMF imposed austerity and structural adjustment.

“The reform momentum has not gained the critical mass necessary to begin transforming the investment climate," it said.

The mission appeared to have rejected the analysis of some economists that pin the blame for the investment strike on the lack of opportunities to make a profit in a contracting economy made worse by EU-IMF-imposed austerity.

In a swipe at the competence of the government, the statement said that progress in preparation of the privatisation of vast swathes of the public-sector have now been achieved but only after the creation of “a professionally managed privatisation fund”.

The team admitted however that revenues from privatisation are likely to be “significantly lower than expected,” and warned that the process must remain “independent from political pressures”.

The troika mission did find one bright spot: a rebound in exports “albeit from a low base” as a result of declining wages.

They also welcomed a restructuring of the transport sector, licensing procedures and deregulation of a number of professions.

The latter has produced substantial anger amongst lorry and drivers, who had to take out loans in the tens of thousands. New drivers now pay massively reduced licence fees while the older ones still must pay off their sizeable debts.

Still, the troika worries that even here, “overall progress has been uneven” and a “reinvigoration” of such deregulation is necessary. The troika believes it “essential” that the authorities put “more emphasis” on restructuring of the economy.

On the streets of the country however, civil unrest remains the government’s main barrier to such moves.

On Tuesday, public transport was paralysed once again in the capital while civil servant blockaded the interior ministry and the general accounting office.

Separately, oil refinery workers announced they will continue their industrial action as long as necessary in protest against the government’s intentions to cut spending in the sector. Petrol stations have supplies for another three to four days, according to local reports, while cars have begun queueing outside forecourts.

Prime Minister George Papandreou is scheduled to meet EU Council President Herman van Rompuy on Thursday for talks.

Greek civil servants block troika from entering finance ministry

Inspectors from the so-called troika of the EU, European Central Bank and the International Monetary Fund returned to Athens on Thursday to review the Greek government’s austerity work, only to find staff from seven key ministries blockading their way.

Cracks show in EU austerity doctrine

If the subtle change in emphasis in the EU’s discourse on austerity is to be believed, some in the bloc are beginning to be much more open to policy options beyond public-sector cutbacks.

Barroso outlines 'comprehensive' roadmap to tackle eurozone crisis

European Commission President Jose Manuel Barroso on Wednesday outlined a five-point “roadmap” aimed at bringing an end to the eurozone crisis that has rattled world markets and threatened to drag the global economy into a second recession.

Exclusive

Brexit row delays financial products transparency review

A European financial regulatory body set up after the financial crisis is at loggerheads with the European Commission over whether to carry out a transparency review of certain financial products. The reason: Brexit.

News in Brief

  1. Trump turned down: Greenland not for sale
  2. UK Libdems would back Clarke or Harman as new PM
  3. Six countries agree to take 'Open Arms' ship migrants
  4. Gibraltar judge: Iranian ship should be released
  5. Increasing fears of a global recession
  6. Far-right hate crimes on the rise in Germany
  7. EU steel tariffs have 'worked well' so far
  8. Italian court: Migrant rescue ship can enter Italian waters

Opinion

Why von der Leyen must put rights at core of business

Ursula von der Leyen's in-tray must include those European executives on trial for systematic workplace harassment, the break-up of European slavery rings, and allegations of European companies' abuse in palm oil, including child labour, land grabs, and deforestation.

Stakeholders' Highlights

  1. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  2. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  3. Nordic Council of MinistersNo evidence that social media are harmful to young people
  4. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  5. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  6. Nordic Council of MinistersEducation gets refugees into work
  7. Counter BalanceSign the petition to help reform the EU’s Bank
  8. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  9. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  10. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  11. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  12. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North

Latest News

  1. Selmayr did not keep formal records of lobby meetings
  2. EU asked to solve migrant rescue deadlock
  3. Internal EU paper: Second Brexit vote was no longer 'distant dream'
  4. EU has 'zero incentive' to break open 'trilogue' deals
  5. Denmark plans import ban on EU-approved pesticide
  6. US offers Johnson helping hand on Brexit
  7. Italy: New government without Salvini in the making
  8. Brexit row delays financial products transparency review

Stakeholders' Highlights

  1. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  2. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  3. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  4. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  5. Nordic Council of MinistersNordic commitment to driving global gender equality
  6. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  7. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  8. Nordic Council of MinistersNordic talks on parental leave at the UN
  9. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  10. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  11. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  12. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership

Join EUobserver

Support quality EU news

Join us