Brussels, 13/03/2014 (Agence Europe) - On Thursday 13 March, the European Parliament adopted two reports on the work of the troika of lenders (European Commission, European Central Bank and International Monetary Fund) in countries in receipt of financial aid - one penned by the European Parliament's economic and monetary affairs committee (ECON), and one by the Parliament's social affairs committee.
MEPs agree on a common position on how the eurozone should deal with budget crises in the future, but the debate in plenary on Wednesday 12 March turned into a typical clash between left and right.
Ireland and Spain have exited their aid plans (Spain's only covered its banks), and Portugal is preparing to exit is programme in May. The economic prospects for Greece are showing the first green shoots of recovery and the Commission's crisis resolution strategy was given backing in the debate. Co-rapporteur for ECON, Austria's Othmar Karas (EPP), said that the troika “must not be made the scapegoat for the problems. It prevented a disaster.”
Alejandro Cercas (S&D, Spain), the social affairs committee's rapporteur, took the opposite view, describing a “social tsunami” of devastation caused by the troika's austerity policies. In Spain, for example, anti-austerity demonstration mustered a third of a million people a few years ago, but that has now grown to a million. In Greece, a significant proportion of the population no longer has access to health care, pointed out Michèle Rivasi (Greens/EFA, France). Cercas quoted Economic and Monetary Affairs Commissioner Olli Rehn's comment that it would take a decade to bring Spanish unemployment down to its pre-crisis level. The way Cercas sees it, the Irish statistics that show unemployment falling are deceptive because as the same points out in its monitoring report, this is due more to a fall in the working population as people of working age leave the country to seek work elsewhere than to a rise in employment.
The EPP Group, seen as the defender of budget orthodoxy, accused the left in a tweet of being busy campaigning for the European election on the back of the troika report. In the debate in Strasbourg, Regina Bastos (EPP, Portugal) reminded fellow Portuguese MEP Ana Gomez (S&D) of the state the left government had left the country in a few years ago. The EPP tweeted: “Left governments waited too long before they asked for financial assistance. Social costs are bigger.”
Rehn said: “We agree that the macroeconomic imbalances that made these decisions necessary were built up in the decade before the crisis in the countries that faced this situation” and the strategy pursued had been based on extending solidarity in return for solidity. The road to hell is paved with good intentions, Portugal's Marisa Matias (GUE/NGL) reminded him.
MEPs from Rehn's ALDE Group, Olle Schmidt (Sweden) and Sylvie Goulard (France), said that ambulance drivers shouldn't be shot. Goulard welcomed the debate and report for introducing a little democracy.
Co-rapporteur Liem Hoang Ngoc (S&D, France) for ECON, said that the disagreements that had arisen within the troika itself showed that a number of policy options had been possible, some of which might have made the adjustment less tough for ordinary people. Philippe Lamberts (Greens/EFA) reminded people that “adjustment” was a euphemism. Hong Ngoc mentioned the bail-in of senior bondholders at the start of the Irish plan that had been recommended by the IMF, but rejected by the ECB, and which would have meant that Irish taxpayers would not have had to pay so high a bill. Some MEPs said that the burden should be shared by the different political leanings.
Despite the clear differences of opinions expressed, the EPP and S&D managed to agree behind the scenes that the final report would be closer to the version drawn up by ECON, and closed the door to amendments lodged by GUE/NGL and the Greens/EFA.
EMF. The ECON report calls for the European Stability Mechanism to be turned into a “Community” European Monetary Fund (EMF) (see EUROPE 11025). Admitting the advantages of being safe rather than sorry and the now stronger package of budget surveillance tools at its disposal, the Commission says that strong crisis resolution systems are needed because things do not always happen the way people imagine they will. The Parliament hopes that the troika report will lead to tangible action.
The ECON report was endorsed by 448 votes to 140 and 27 abstentions, and the social affairs committee's report by 408 to 135 and 63 abstentions. (EL)