Brussels, 06/02/2014 (Agence Europe) - The two European Parliament co-rapporteurs have reached the same conclusion at the end of their investigations into the role of the troika (European Commission, European Central Bank and International Monetary Fund) in the financial aid programmes for euro nations. They both call for the setting up of a European Monetary Fund (EMF) under Community regulation. More than 900 amendments were lodged and the report will be voted upon at an EP committee meeting on 24 February.
In the amendments, Othmar Karas (EPP, Austria) “calls for the creation of a European Monetary Fund on the basis of Union law, which will act according to the Community method, and points out that such an EMF should combine the financial means of the ESM geared to support countries experiencing balance of payments problems or facing state insolvency with the expertise that the Commission (DG ECFIN) has gained over the last few years in this field”.
Liêm Hoang-Ngoc (S&D, France) believes that “this European Monetary Fund should be based on joint and several guarantees from the member states.'
In other amendments, Hoang-Ngoc calls for calls “for the ECB to be no longer involved in the preparation of structural reforms in the member states” and also calls for “any future involvement of the IMF to be optional, limited and subject to approval from the EP”. He “strongly rejects the Commission proposal for bilateral contractual arrangements, which represent the continuation of the troika system to all member states” of the eurozone.
The co-rapporteurs' main differences are in how they view the background to the financial crisis. Karas stresses the bad state of public finance before the crisis broke out and the very late stage at which aid was requested by the countries in question, the fact that it emerged during the investigation that there had been no alternative to the structural adjustment and the key to the programme's success being ownership of the reforms by the country in question.
Hoang-Ngoc stresses the power of the banks when it comes to public debt, the troika's macroeconomic projections which were consistently over-optimistic, the ECB's refusal to restructure the Greek debt at the outset and the fact that a country's strong ownership of a programme is not possible without democratic legitimacy and democratic responsibility at national and European levels. He calls for an immediate restructuring of the Greek debt, particularly the assets held by the ECB, the eurozone's temporary bailout fund (EFSF) and the IMF. He supports Ireland's call for direct, retroactive recapitalisation of banks by the ESM applying to Irish banks that received a bailout. (EL/transl.fl)