THE BLOG

Worth the Austerity? Why the European Parliament Is Conducting an Inquiry Into the Impact of Troika Measures

21/01/2014 15:52 GMT | Updated 23/03/2014 09:59 GMT

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Bailout countries have been on the Troika's leash now for nearly four years, but just how effective have its measures been. The Troika - composed of the European Commission, the European Central Bank and the International Monetary Fund - is tasked with getting economies back into shape by proscribing a diet of strict austerity and plenty of strenuous reform measures, but its methodology has been questioned since the start.

None of the countries has gone bankrupt, their competitiveness has increased, the euro still exists and the European Union is holding. However, this progress has come at the cost of crippling austerity, growing political instability and increasing poverty. The latest* youth unemployment figures illustrate once again just how dire the situation is in the bailout countries. Worst hit are Greece and Spain, with respectively 54% and 57.7% unemployment among the under 25s, followed by 40% in Cyprus 24.8% in Ireland and 36.5% in Portugal.

These problems do not show up in balance sheets, so the European Parliament is conducting an inquiry into how Troika measures have affected the people living in the bailout countries.

Over the last few years MEPs have often scrutinised the Troika's measures and held policy makers to account. However, the new inquiry takes a bird's eye perspective in order to evaluate what difference nearly four years of following Troika programmes have made to people living in these member states.

The inquiry consisted of visits to the countries affected and hearings in the Parliament. During the visits, an EP delegation met ministers, MPs and representatives of civil society. MEPs also questioned current and past policy makers involved with the Troika, including Economics Commissioner Oli Rehn, former ECB head Jean-Claude Trichet and Klaug Regling, director of the European Stability Mechanism.

The committee of inquiry considered the draft report on 16 January. It calls for more accountability as well as European guidelines to ensure sufficient democratic control on carrying out measures at the national level. It also proposes to create a European Monetary Fund within the EU to serve as an alternative to the IMF.

A questionnaire was sent to the institutions and governments involved with the bailout programmes on 22 November 2013. The evaluation of the Troika will continue the coming months and MEPs are expected to vote on the final report during the March plenary.

One of the most interesting things about the report will be input from ordinary people. For the first time ever the man in the street had the chance to contribute to an official Parliament report. Alejandro Cercas, who is writing the report on the role of the Troika, invited Europeans to share their experiences of the Troika with him through LinkedIn . As the Spanish MEP explained: "Europe is not a club of creditors and it can't be all about the economy. On the contrary, EU policies could and should serve the people."

* The unemployment figures for Greece and Cyprus are for September. Figures for the other three countries are from November

Photo copyright Piazza del Poplo (released under Creative Commons)