MEPs pick holes in bailouts, call for new approach
The troika faced an immense challenge in dealing with the euro crisis but the adjustment programs it helped implement in Greece and other countries lacked transparency and were not fully adapted to those states, according to a European Parliament committee, which recommended on Tuesday the International Monetary Funds involvement in future bailouts be optional.
The Economic and Monetary Affairs Committee in Brussels approved on Tuesday by 31 votes to 10 the findings of a report compiled after several weeks of visits to program countries and hearings in the Belgian capital.
The MEPs acknowledged the pressurized conditions in which the bailouts were put together but their report denounces the lack of transparency in negotiations and deplores the sometimes over-optimistic assumptions made by the troika. It also regrets that the programs are not bound by the Charter of the Fundamental Rights of the European Union and the Treaties.
Apart from accusing the troika of weak democratic accountability, the troika inquiry also highlights that national parliaments were given short shrift during negotiations. When consulted, national parliaments were faced with the choice of eventually defaulting on their debt or accepting memoranda of understanding negotiated between the troika and national authorities, the report said.
The MEPs were also critical of the role of eurozone finance ministers, saying that the Eurogroup had overstepped its authority despite not being an official institution of the European Union.
The report calls for the eurozone to rethink the way it administers bailouts in the future. Apart from limiting the role of the IMF, the MEPs also recommend that the European Central Bank should only...