Thursday

23rd Mar 2017

MEPs call for dismantling of EU bailout 'troika'

The "troika" of international lenders, which sets the terms of eurozone bailouts with little or no democratic oversight, should be replaced by an EU system which is accountable to the European Parliament, MEPs say.

"All European instruments that are not based on EU law are provisional. EU instruments should be based on the community method, with the European Parliament acting as democratic legitimator and control body," Austrian centre-right deputy Othmar Karas told press in Strasbourg on Wednesday (15 January).

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

Karas is drafting a report together with a French Socialist colleague, Liem Hoang-Ngoc, on the work of the troika.

The name refers to anonymous officials from the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) who managed rescue packages for Cyprus, Greece, Ireland and Portugal.

After holding three hearings with troika representatives this week and after visiting Cyprus and Portugal, the two MEPs said the "ad-hoc body" is not viable in the long run.

They disagreed on when the troika should be dismantled, however.

"If the troika is eliminated now in programme countries, there will be chaos and crisis. The IMF alone has too little money to be the sole lender, while the European Stability Mechanism still needs to be communitarised," Karas said.

“We can't cope with crises with no instrument whatsoever," he added.

He put forward two alternatives - transforming the eurozone bailout fund (ESM) into a European Monetary Fund under EU law, or tasking the European Commission and the ESM with creating a new bailout body which is equally anchored in the EU treaties.

Earlier on Wednesday, ESM chief Klaus Regling also told MEPs that he envisages a future EU-only body that will handle any new crises "over the next decades” without IMF involvement.

He said the IMF initially contributed a third of the money used for the eurozone bailouts, but that that its current contribution is 10 percent.

Disagreements within the troika, with the IMF preferring solutions which the ECB or the EU commission refused to accept, have prompted rumours the IMF will eventually leave.

But for the Socialist group in the EU parliament, the reform process is moving too slowly.

The Socialist leader, Austrian MEP Hannes Swoboda last week said he would prefer if the troika was shut down this year because it is continuing to push for austerity instead of more growth-friendly measures.

“Dismantling the troika during this [Greek] EU presidency would be a real victory for Greece and for Europe,” he noted.

The Socialists’ Hoang-Ngoc said they want an EU treaty change, involving a convention which includes the EU parliament, in order to enshrine any novel intergovernmental structures in EU law.

"Everywhere we go, we [MEPs] are seen as the only ones who are on an equal footing with the ECB and the commission. There is tremendous hope put in us," he noted.

Asked what would have been different if the EU parliament had been involved in bailouts from the start, the French MEP replied "perhaps nothing, because the current majority would maybe have voted for austerity [anyway].”

"But there would have been democratic legitimacy," he added.

The EU parliament’s troika inquiry will visit Ireland this week and Greece at the end of the month.

A vote on its final report is scheduled for February in the economic affairs committee and for March at plenary level.

Greece: The troika strikes back

Officials from creditor institutions - the so-called troika - are to resume Greek supervision, in what critics say is an erosion of democracy.

Stolen Russian billions ended up in EU states

Illicit money flowing out of Russia ended up in almost every single EU state, an investigation has found, posing questions on the integrity of Europe’s banking systems.

News in Brief

  1. British police make first arrests in London terror probe
  2. EU commission has received Facebook reply on WhatsApp
  3. Rome expects thousands of protesters at summit
  4. Dijsselbloem says his comments had 'Dutch directness'
  5. Ukraine spy agency bars Russian Eurovision singer
  6. Turkish president Erdogan threatens Europeans
  7. Russia invites EU diplomats to occupied Crimea
  8. UK parliament in lockdown after reported attack

Stakeholders' Highlights

  1. EJCExpresses Concern That Extremists Still Have the Ability and Motivation to Murder in Europe
  2. European Gaming & Betting AssociationAudiovisual Media Services Directive to Exclude Minors from Gambling Ads
  3. ILGA-EuropeTime for a Reality Check on International Day for the Elimination of Racial Discrimination
  4. UNICEFHuman Cost to Refugee and Migrant Children Mounts Up One Year After EU-Turkey Deal
  5. Malta EU 2017Council Adopts New Rules to Improve Safety of Medical Devices
  6. Nordic Council of MinistersNordic Energy Research: How to Reach 100 Percent Renewable Energy
  7. Party of European SocialistsWe Must Renew Europe for All Europeans
  8. MEP Tomáš ZdechovskýThe European Commission Has Failed in Its Fight Against Food Waste
  9. ILGA-EuropeEP Recognises Discrimination Faced by Trans & Intersex People
  10. Nordic Council of Ministers25 Nordic Bioeconomy Cases for Sustainable Change
  11. Malta EU 2017Consumer Protection Laws to Be Strengthened by EU-Wide Cooperation
  12. European Free AllianceSupporting Artur Mas: Democracy and Freedom Cannot Be Convicted

Latest News

  1. Ending the migrant deal with Turkey may save the EU
  2. Poland unlikely to face EU discipline on rule of law
  3. Rutte courted Wilders' voters, now he must deliver
  4. Barnier to UK: trade talks will come after settling accounts
  5. EU declaration to voice unity in troubled times
  6. Terror attack shuts down UK parliament
  7. Catalonia and Scotland at core of Europe's geopolitical conundrum
  8. La présidentielle française sous cyber-alerte maximale