The EU's crisis-fighting mechanism needs true democratic accountability, clear channels of responsibility, more consideration of social consequences, and an ability to correct policy recommendations when they prove inadequate. These were some of the first conclusions MEPs drew in Thursday's discussion on draft report analysing the operations of the European Central Bank/IMF/EU Commission “Troika”.
Economic and Monetary Affairs Committee MEPs, led by co-rapporteurs Othmar Karas (EPP, AT) and Liem Hoang Ngoc (S&D, FR), have held hearings with key Troika players this week and received many replies to questions sent to the Troika institutions and authorities of the “programme countries” whose anti-crisis measures they advised. MEPs have also paid fact-finding visits to Lisbon and Nicosia, and will visit Dublin, starting today, and Athens, by the end of the month.
Parliament is to approve the Troika inquiry’s final findings in a plenary vote in April..
Opening today's discussion, Mr Karas stressed the need to bear in mind that the EU had been caught on the wrong foot when the crisis hit and had lacked both the financial means and the expertise to handle the flailing countries. There may therefore have been no alternative to the Troika at that time, but "We now have the funds and systems to control national budgets so we must get the system within the normal EU process" he said.
Mr Hoang Ngoc said that the role of the European Stability Mechanism, the EU bailout fund, should be stepped up and that the European Parliament should have a bigger say in decision taking, especially as regards what “conditionality” strings to attach to financial assistance. "Disputes between the Commission and the IMF over whether to use fiscal consolidation or devaluation led to both having been applied, causing excessive damage", he said.
These views were echoed by many others, with Philippe Lamberts (Greens, BE), also suggesting that a future firefighting system would enable the European Parliament to give the Commission a broad mandate for action, but also a right to send back a specific reform roadmap (Memorandum of Understanding) back to the drawing board if necessary.
A bad day for responsibility
MEPs lamented the difficulty of assigning any form of responsibility to a specific player or institution. "It is disappointing that nobody is able to say ‘mea culpa’ in all this", commented Olle Schmidt (ALDE, SV). Others remarked that a normal democratic structure should make it possible always to ascertain who is responsible, arguing that this proved the Troika's lack of democratic and transparency credentials.
Others criticised the alacrity with which some Troika officials had blamed governments and appeared to exonerate private companies, which had also played a big part in tipping the EU into crisis.
MEPs criticised the Troika less for making mistakes than for failing to correct its recommendations when they proved inadequate and detrimental. The alternative model must be one based not only on austerity, they said. Social considerations must be factored in and the policy of making ordinary people pay the most of the bill must be changed, said Marisa Matias (GUE/NGL, PT).