Thursday

21st Jun 2018

MEPs slam Rehn over economic policy

  • Rehn: admitted the Troika should be subject to greater transparency (Photo: europarl.europa.eu)

EU economic affairs commissioner Olli Rehn faced a sustained verbal shellacking on Thursday (25 April), with MEPs on both the left and the right finding fault with his policy-making.

Rehn, who was speaking at a hearing with the economic and monetary affairs committee in Brussels, found himself criticised by the right for going soft on austerity and chastised by the left for not doing enough to promote growth.

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Jean Paul Gauzes, spokesman for the centre-right EPP group, accused him of "lacking courage and conviction."

It would be "a very bad sign if we say we have to move away from austerity," he noted.

The committee debate comes towards the end of a week in which EU officials offered conflicting views on the pace of economic reform in the eurozone.

For his part, European Commission President Jose Manuel Barroso indicated in a speech that austerity had "reached its limits," even though the EU executive was quick to maintain that its economic policies remain unchanged.

In a nod to efforts made to balance budgets across European capitals, Rehn noted that the pace of deficit reduction would slow to 0.75 percent in 2013 compared with a 1.75 percent fall in 2012.

Most countries now "have the room to make fiscal policy with a more medium-term view," he said.

But his comment was not enough to pacify the centre-left.

Green MEP Philippe Lamberts accused Rehn and the EU's other economic policy chiefs of "collective blindness."

Elisa Ferreira, the Portuguese spokesperson for the Socialist group, said her country is heading "straight for disaster" because the EU has provided no alternative to austerity.

"Enough is enough," she said.

Her fellow-countryman Diogo Feio, a centre-right MEP, called on the commission to offer incentives to Portugal, warning that the "social and political consensus is extremely fragile."

"If you have a country that respects its commitments you need to provide more instruments," he said

Rehn also conceded on the need for more transparency on decision-making in the Troika - a joint body of commission, European Central Bank and International Monetary Fund officials which control EU bailout conditions.

The commissioner himself described the Troika's work as "complex and cumbersome."

"You have 20 vetoes and 20 red lines which … leads to decisions that are not first best, but second best," he said.

Opinion

Why austerity is failing in Europe

Until recently, Brussels has supported primarily front-load austerity measures. When President Hoover tried similar policies in the 1930s America, a severe recession morphed into a devastating Great Depression.

Agenda

Talking about monetary union and Cyprus this WEEK

Senior EU politicians will gather for a conference in Brussels Tuesday on how to reach economic and monetary union amid strong divisions between member states about the speed and order of the successive steps.

Greek bailout exit takes shape

At a meeting next week, eurozone finance ministers and the IMF are expected to agree on new cash, debt relief measures, and a monitoring mechanism to ensure that Greece can live without international aid for the first time since 2010.

Opinion

Eurozone needs institutional reform

Both the examples of Greece and Italy test the limits of a system with inherent weaknesses that feeds internal gaps, strengthens deficits and debts in the European South, and surpluses in the European North respectively.

Opinion

Europe could lose out in North Korean bonanza

South Korean businesses including Hyundai and Samsung are already scoping investment opportunities. Will North Korea become a 'new Vietnam' opportunity - or more like Myanmar, where slow Brussels policy-making meant EU exporters lost out.

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