Wednesday

19th Sep 2018

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).

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

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.

'Every group split' ahead of EU copyright vote

Political groups in the European Parliament are split about how to vote for a directive that would reform the EU's copyright regime - amid warnings that freedom of expression and creators' rights are at risk.

News in Brief

  1. EU investigating BMW, Daimler and VW 'collusion'
  2. Spain wants special Gibraltar chapter in Brexit deal
  3. Italy cancels Vienna talks over South Tyrol 'dual citizenship'
  4. Britain will not accept Brexit deal with Irish Sea border
  5. Slovakia seeks witness to journalist killing
  6. Finland's Stubb considers running for EU commission job
  7. Romania ponders anti same-sex marriage referendum
  8. EU lawyers back Slovenia in Croatia border dispute

Opinion

Aid, migration and the next EU budget

Th next EU budget is the most pivotal opportunity to advance a vision for Europe rooted in human rights and that builds a Union that works for all its members.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  2. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  3. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  4. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  5. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  6. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  7. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  8. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  9. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  10. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  11. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  12. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want

Latest News

  1. EU promotes 'Egypt model' to reduce migrant numbers
  2. Tensions mount over Kosovo-Serbia deal
  3. New book: Why war is coming
  4. EU parliament will not budge on office expenses
  5. Why Orban's project to reshape EU politics will be unsuccessful
  6. 10 years after Lehman Brothers what has changed for EU consumers?
  7. Sefcovic launches bid to be EU Commission president
  8. Is Russia blackmailing the Council of Europe?

Join EUobserver

Support quality EU news

Join us