Monday

25th Jun 2018

Juncker praises Greek austerity amid talks to disband troika

Incoming European Commission president Jean-Claude Juncker on Monday (4 August) said he did everything in his power to keep Greece within the eurozone during the height of the financial crisis.

“I fought like a lion against the intention of those who wanted to have a grexit from the eurozone,” Juncker told reporters in Athens.

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Speaking alongside Greek prime minister Antonia Samaras, Juncker praised Greek efforts to stabilise its economy with the budget-cutting measures having contributed to record-high unemployment and a sharp rise in poverty.

Greece’s unemployment rate at the onset of the financial crisis in May 2008 was 7.3 percent. It then shot up to a record high of 28 percent earlier this year with more than half of those under-25 without a job.

But Juncker warned that the crisis is not yet over.

“Many developments, events show us how fragile the situation is not only in Greece but elsewhere,” he said.

As former chair of the eurogroup of eurozone finance ministers, Juncker helped negotiate and supervise bailout packages for Greece, Ireland and Portugal.

The eurogroup is seen as a ‘fourth’ member of the so-called 'troika' of lenders - the European Commission, European Central Bank and International Monetary Fund.

In a report earlier this year, MEPs described the troika as an “ad-hoc” set-up with no clear legal basis and with no democratic scrutiny.

Representatives from the troika regularly go to bailed-out countries to assess how they are implementing reforms. Their reports form the basis for decisions on whether countries should get the next tranche of aid.

Troika set to be dismantled

But on Monday, Reuters reported that senior EU officials are now in early discussions on disbanding the troika and allowing Greece greater freedom to formulate and pursue its own policies.

"There would be no troika," an unnamed official told the news agency.

"There must be Greek ownership of reform. The Greeks have until October to come up with a programme, which would be decided by December for the start of 2015,” added the source.

Greece obtained two bailouts totalling €240 billion.

But the cash-strapped Greek government is still facing €320 billion in debt or the equivalent to 175 percent of its entire annual economic.

One idea, reports Reuters, is to award Greece some debt relief for every milestone achieved once it commits to a six-year plan of reform. The IMF would still supervise the country until 2016.

The troika would be scrapped in favour of a special European Commission taskforce. The taskforce would then check up on Greek reforms twice a year.

In case things go wrong, Greece would get a precautionary eurozone loan and tighter supervision.

Opinion

The EU's hypocrisy toward Greece

EU leaders have shown total contempt for their commitments to social and labour protections in their policy towards Greece.

End-of-troika debate amplifies ahead of Greek elections

A legal opinion by the EU top court and comments by the EU economics commissioner about the end of the bailout troika have come just days before elections in Greece, where troika-imposed austerity is a central issue.

Opinion

Europe needs hope

The victory of Syriza in Greece is important not only for Greek people, but also the rest of Europe. With the crisis and the rise of the far-right, a left alternative is urgent.

Germany: No need to get rid of troika

Germany sees no need to put an end to the 'troika' of international creditors in Greece, in a snub to EU commission chief Jean-Claude Juncker.

Greece and creditors proclaim 'end of crisis'

After late-night talks, the Eurogroup agreed on a €15bn disbursement and debt relief measures for Greece, while setting out a tight monitoring when the bailout ends in August.

Opinion

The risks behind the 'green bond' boom

The EU should not overuse the financial system in order to achieve environmental goals, or it risks the emergence of a green bond bubble which would be detrimental to the financial sector and hinder the achievement of climate targets.

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.

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