Wednesday

26th Apr 2017

MEPs redouble attack on bailout 'troikas'

  • MEPs cannot do away with the troika, but ask for it to be reformed (Photo: Luc Mercelis)

MEPs investigating the troika of international lenders in bailout countries have said it was marred by conflicts of interest and lacked democratic accountability.

The economic affairs committee on Monday (24 February) adopted the non-binding report, which is to be voted on by the entire European Parliament in April.

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.

Set up on an "ad-hoc basis" as the eurozone was battling the sovereign debt crisis - the troika (containing representatives from the EU commission, European Central Bank and the International Monetary Fund, or IMF) - is on shaky legal grounds and should be replaced with a European version of the Washington-based IMF anchored in EU law, MEPs say.

The report "acknowledges that this might lead to the necessity of a treaty change," a process that takes several years to negotiate and ratify in all EU countries.

Eurozone finance ministers in the Eurogroup also bear "political responsibility" for the accompanying austerity measures that had to be implemented in Portugal, Greece, Cyprus, and Ireland in return for the EU-IMF loans, MEPs said.

They also question the dual role of the EU commission as guardian of the EU treaties but also acting on behalf of member states within the troika.

"There is a potential conflict of interest ... especially in policy areas such as competition and state aid policy, social cohesion, and with regard to member states wage and social policy on which the commission has no competence," the report notes.

The European Central Bank also has conflicting interests as "technical advisor" within the troika and creditor of the bailed-out countries, MEPs said.

Another issue is the "generally weak democratic accountability" of the troika in the bailed-out countries' parliaments.

After trips to the four countries, MEPs found that "when consulted, national parliaments were faced with the choice between eventually defaulting on their debt or accepting memoranda of understanding negotiated between the troika and national authorities."

The contracting of consultancy firms without public tender and for "very high fees" to accompany the work of the troika, as well as potential conflicts of interest held by these companies in the respective countries should be object of a "transparent assessment," the report says.

Back in December, EUobserver reported on the multi-million consultancy business accompanying the troika, often beyond scrutiny.

The report lists a number of recommendations, both in the short and long term, aiming at clarifying the roles and the tasks of each participant of the troika.

The Eurogroup, the Council of Ministers and the European Council of EU leaders are called to assume full responsibility for the troika's operations.

The EU commission is asked to provide a comprehensive assessment of its involvement in the troika programmes, including on fundamental rights. According to a German legal expert who spoke to EUobserver last month, the austerity programmes approved by the troika are in breach of the EU Charter of Fundamental rights.

"Every member state has got clear rules on how to deal for instance with ailing municipalities, which face insolvency. The EU too, needs clear rules on how to deal with states in crisis. The troika was a necessary interim solution. But in the long run we need rules on the basis of EU law," Austrian centre-right MEP Othmar Karas said after the vote.

Green Belgian MEP Philippe Lamberts said the report is a "clear and detailed rebuke" to the troika and has uncovered "unacceptable complacency, with assistance programmes based on overoptimistic and half-baked forecasts."

On conflicts of interest, Lamberts noted that they "undermined the democratic accountability of the policies" and weakened the balance of powers between EU institutions.

"We hope a strong majority of MEPs will support the crucial findings of this report, when it is voted by the parliament as a whole, and that its recommendations will be swiftly acted on," he said.

Eurogroup makes 'progress' on Greek deal

Eurozone ministers endorsed an agreement in principle between the Greek government and its creditors over a new package of reforms. But talks on fiscal targets and debt could still block a final agreement.

New anti-trust complaint looms over Microsoft

At least three security software companies “met several times” with the European Commission to complain about Microsoft’s alleged abuse of its market position. A formal case could follow.

Commission stops German-British stock merger

The decision to block the merger of the London Stock Exchange and Deutsche Boerse was expected, as negotiations between the parties broke down a few weeks ago.

New anti-trust complaint looms over Microsoft

At least three security software companies “met several times” with the European Commission to complain about Microsoft’s alleged abuse of its market position. A formal case could follow.

Investigation

MEPs oppose EU agency to prevent Dieselgate II

The European Parliament said on Tuesday that there should be more EU oversight on how cars are approved, but stopped short of calling for an independent EU agency.

News in Brief

  1. EU Commission launches probe into Hungary's university law
  2. Scots slowly losing appetite for independence - poll
  3. Council of Europe puts Turkey on watch list
  4. EU to put parental leave on political agenda
  5. Israel cancels German meeting over human rights groups
  6. Hungary's Orban will participate in EU parliament debate
  7. Malta floats cash-for-refugees plan
  8. Ivanka Trump to meet Merkel at Berlin women's conference

Stakeholders' Highlights

  1. UNICEFRace Against Time to Save Millions of Lives in Yemen
  2. Nordic Council of MinistersDeveloping Independent Russian-Language Media in the Baltic Countries
  3. Swedish EnterprisesReform of the European Electricity Market: Lessons from the Nordics, Brussels 2 May
  4. Malta EU 2017Green Light Given for New EU Regulation to Bolster External Border Checks
  5. Counter BalanceCall for EU Commission to Withdraw Support of Trans-Adriatic Pipeline
  6. ACCAEconomic Confidence at Highest Since 2015
  7. European Federation of Allergy and Airways60%-90% of Your Life Is Spent Indoors. How Does Poor Indoor Air Quality Affect You?
  8. European Gaming and Betting AssociationCJEU Confirms Obligation for a Transparent Licensing Process
  9. Nordic Council of MinistersNordic Region and the US: A Time of Warlike Rhetoric and Militarisation?
  10. European Free AllianceEFA MEPs Vote in Favor of European Parliament's Brexit Mandate
  11. Mission of China to the EUXinhua Insight: China to Open up Like Never Before
  12. World VisionViolence Becomes New Normal for Syrian Children

Latest News

  1. European states still top media freedom list
  2. Let’s not put European public health at risk
  3. Threatened Budapest university calls for EU support
  4. Orban set to face down EU threats
  5. Dont expect 'quick fix' in Syria, China tells EU
  6. Russische schwarze Kassen bedrohen EU Demokratie
  7. Libya commanders in Brussels for migration talks
  8. Mixed review for EU asylum spots in Greece and Italy