Who is troika europe

In a similar manner, the European Commission tended to take special care of weaker nations, in order to promote a harmonious development of economic activities throughout the Community, a European mission expressly assigned in the Treaty of Rome. Taken into account the role conferred by the Treaties to the European Commission, and its long commitment as an independent institution since the beginning, it has served as a parachute for small and medium member states, protecting them against the ambitions of some of the more powerful nations.

Thus it should be asked whether the working of the Commission within the framework of financial assistance programs for Eurozone countries could, in some way, undermine its political position within the EU political system.

Needless to say, the fact that the European Commission is acting on behalf of the member states in the case of financial assistance programs, is clearly separated from its political role within the EU political process.

Indeed, by accepting this task that was conferred by the member states, the Commission is refraining from acting as an independent institution. Moreover, the Commission appears in a subordinate position with regards to those who gave it the mandate to act within the framework of financial assistance. In fact, the Commission is acting as an agent of the member states, in a role that does not conform to its legal status within the EU political system.

Therefore, it could be said that the way that financial assistance programs for Eurozone countries were designed, in institutional terms, weakened the European Commission's political role within the EU political process.

It should be stressed that the assessment of the general interest of the Union in the framework of the Euro crisis could be debatable.

Indeed, this crisis not only caused a new cleavage among Eurozone countries-between creditors and borrowers-but it should also be taken into account that the Euro is a currency used by less than two thirds of EU member states.

Moreover, it was clear from the beginning that creditor and borrower countries were providing conflicting narratives on both diagnosis and therapy for the crisis. The fact that the Commission appeared in the Troika negotiations as a non-independent institution, acting on behalf of the member states, could also raise the question as to whether the Commission is playing a role that is in some way more similar to that of a Secretariat of an international organization.

Indeed, most of the decisions concerning the functioning of the monetary union that were taken in the aftermath of the Euro crisis, were decided at an intergovernmental level, especially those regarding the creation and functioning of the European Stability Mechanism, which supervises the provision of financial assistance to Eurozone countries. Despite the use of a non-community method for some of the new Euro-area tools, the Commission is deeply involved in its implementation-as occurred in the case of the Troika negotiations.

Hence, Troika negotiations-which were a central feature of the European Union's reaction to the Euro crisis-could affect the rank of the Commission within the framework of the European political process. The fact that the Commission was not acting as an independent institution, that it could not address the general interest of the Union in a wider perspective and neither was it able to protect the interests of weaker member states against the will of the more powerful ones, all contribute to a case for relegating the political status of the Commission.

Those events could even have been accepted by some, if they had been considered to be exceptional in the face of an emergency situation, such as the turmoil that affected the monetary union in the aftermath of the international financial crash. At that time, international markets took advantage of the weaknesses of the single currency system up to a point whereby the whole project of an European currency was at stake for a while, and Eurozone countries were forced to react to sustain the Euro in such a way that did not take into account the composite checks and balances that are fundamentals of the European Union political process.

However, the issues underlined above refer to two dimensions of the political status of the Commission-the downgrade of the Commission's political role, and its lack of independence regarding member states, both of which are problems that have been recognized for more than a decade.

Indeed, the centrality of the Commission's role in the EU political process has been undermined by the set of constitutional amendments adopted since the Maastricht Treaty, in In particular, with the growing role of the European Parliament in EU politics-it has been a constant in all the amending treaties ever since then, ranging from Amsterdam to Lisbon-which was achieved at the Commission's expense, a problem that came to the surface with the resignation of the Santer Commission in Moreover, after reaching its peak of political performance during the Delors' governance, it would be harder for subsequent Commission's presidents to maintain the significance of this institution within a more politicized Union that was endowed with a double legitimacy, being that of both its member states and its citizens.

Hence, the growing role that has been conferred to the European Council and to the European Parliament has reduced the Commission's political visibility, and this effect has been compounded by its own successive weak leaderships. Besides, the independence of the Commission from member states is now being put into question more often.

Indeed, the composition of the Commission by a representative from each EU country tends to weaken the very supranational nature of the institution. This trend became more evident after the Eastern enlargement, whereby new countries looked to its Commissioner as their representative.

Towards a Two-Speed EU. Cambridge: CUP. Hence, the role played by the Commission in the framework of the so-called Troika is a further step in the new balance of power within the European Union's political process, which has seen the Commission losing ground and political influence over the last years Webber WEBBER, Douglas How likely is that the European Union will disintegrate? A critical analysis of competing theoretical perspectives. European Journal of International Relations, Vol.

However, the novelty that these Eurozone financial assistance programs brought to the EU political process, was of the European Commission acting in clear hierarchical dependence of the will of the member states, in particular, those that had a stronger voice in shaping the EU's reaction to the Euro crisis. The financial assistance provided to Eurozone countries was not given as a single payment, but rather loans were made across a certain span of time-which was calculated to be that necessary for the assisted countries to regain full access to the financial markets-that was normally fixed at three years.

During that period of time, the Troika authorized the payment of the various tranches of the total financial package every quarter, after careful assessment of the progress of the agreed terms of implementation that had been established in the initial loan contract-the so-called Memorandum of Understanding.

These quarterly meetings with national authorities were aimed at supervising the level of national compliance with the established goals and financial conditions of the program, in order to liberate the next monetary tranche of the program. Hence, Troika negotiators were endowed with strong powers to oblige the implementation of the conditions set out in the initial agreements, insofar as they could recommend the suspension of the financial loans at any moment, resulting in a consequent freezing of various public commitments in the country in question.

Indeed, the Troika's ability to use that power in the assessment of financial assistance programs became one of the most striking aspects of the whole of financial assistance in the Euro area. In particular, the European Commission proved to take an even more inflexible approach than the renowned IMF financial adjustment hardliners within the framework of the working-group in charge of supervising financial assistance to Eurozone countries.

The Troika's quarterly assessments were so strict, that in practice, national governments had no other choice but to regularly follow the solutions recommended by Troika officials, despite the fact that countries were supposedly meant to maintain the power to make their own decisions as how to implement the financial assistance program's goals.

In fact, as the periodical assessments progressed, Troika officials progressively played a much stronger role, due to the fact that they could decide whether the affected county was on track to receive the remaining tranches of financial support, or not. If one takes into account the way that the Portuguese government dealt with this situation, the nature of Troika activity would perhaps become clearer. From the beginning, the Portuguese deputy prime-minister, Paulo Portas, referred regularly that his country had turned into a de facto Protectorate, due to the financial assistance constraints.

The toughness of the Troika officials was reflected in the language that leading Portuguese government members used to refer to the situation that the country was facing during the period of financial assistance. Obviously the legal concept of a Protectorate was not compatible with the approach taken by the Troika negotiators, but the point is that they basically got to impose most of their preferences on the Portuguese government.

In this sense, the Portuguese Prime Minister Coelho remarked that the country was facing a situation whereby it had lost sovereignty, in the sense that national authorities lacked the ability to decide by themselves most of the decisions that had fiscal implications. This view was also subscribed to by other main European heads of government, such as Italy's former Prime Minister Monti-and previous European Commissioner-when he resisted asking for financial assistance at the peak of the Euro crisis, arguing then that Italy was not to be treated as a colony.

Thus a renowned political actor of the last decade of European integration used an even stronger term to define the kind of relationship that was developing between national governments and Troika officials. Likewise, former Prime Minister Zapatero fought against the insistence of the ECB and some Eurozone countries that Spain should receive financial assistance 4 4 " Thus, it seems that the European Commission took it seriously the mandate received from Euro countries' lenders and adopted a stance towards Eurozone member states with liquidity problems that seemed to forget some of the inspiring guidelines that were enshrined in the original establishment of the European Union political process, namely, the equality of all member states and solidarity among European nations to balance the hegemony of the most powerful countries.

Troika officials have a strong involvement in the making of financial decisions by assisted countries. Indeed, those countries are expected to make formal decisions that incorporate Troika guidelines into their laws and, moreover, are obliged to implement those measures.

Hence, affected countries were strongly influenced by representatives of the Troika, whose opinions were based on the conditions set down in the original Memorandums of Understanding, as well as their own technical knowledge. Therefore, and despite the fact that the concrete measures taken in each Eurozone country within the framework of financial assistance programs were only adopted by national authorities, there is another issue that should be raised: can any political responsibility be assigned to the international institutions that were involved in the negotiations with the Troika?

Indeed, some influential leaders of the Troika institutions, such as Olli Rehn, former Commission's Vice-President, remarked more than once, that financial decisions made by assisted Euro area countries can only to be credited to those member states. That is to say that the Commission discarded any responsibility for decisions taken during the financial assistance process.

However, if one takes into account the strict supervision undertaken by the Troika every three months-which could have led to a suspension of the flow of funds whenever the Troika considered that national governments were not taking the appropriate measures to comply with the conditions established in their financial assistance agreements-it can be seen why leaders of both countries that accepted financial assistance and those that struggled to avoid receiving financial assistance, found it hard to accept such a formalist reasoning for the liability of the Troika institutions.

Even if all the proposed economic policies and fiscal measures had been formally adopted by assisted countries at a national level, in accordance with their constitutional rules, the fact remains that national authorities went through severe scrutiny by Troika officials before a significant number of those decisions were made. Therefore, it cannot be said that the institutions of the Troika did not take part in the choice of national decisions that were taken in the course of financial assistance programs and that they solely resulted from national choices that were only conceived and adopted by domestic institutions.

Thus, and despite the fact that the areas of economic and fiscal policy formally belong to the exclusive jurisdiction of member states, assisted countries were clearly in a dependent situation throughout the time of financial assistance, in the sense that they were unable to officiate major economic and fiscal decisions without prior approval of Troika officials.

For these reasons, attempts to assign exclusive legal and political responsibility to national governments for the entirety of measures taken within the framework of financial assistance programs, can be seen as an effort to release Troika entities of any liability.

Based on the fact that the IMF is an organization that can hardly be accountable in political and legal terms for financial assistance actions taken around the world, on account of the nature of international law, European Union institutions could face a more stringent control of their actions, by means of legal and political tools that are available under European law. Beyond using European law procedures to scrutinize the action of European institutions that took part in Troika negotiations, in particular the Commission, it is unlikely that those institutions will totally reject any sort of political liability for the economic and fiscal policies that were taken by assisted countries over the course of financial assistance programs.

The Troika terminated its harsh and protracted intervention into Greece in August this year. However, opinion among policy-makers at the Commission and IMF, as well as among experts in general, is mixed as regards the success of this intervention. To pay them back, Greece is obliged to achieve budgetary surpluses through continued coercive measures, which will likely further impoverish its people. In Ireland, though harsh, the measures demanded were lighter, more flexible, and simpler.

They also ended much sooner than in the Greek case. Why was this the case? Arguably ideology, not economics, was the key factor. The European consolidation state is a regional variant requiring collective discipline across the Eurozone: all members must acquiesce, since a negative perception by financial markets about the risk of one member may have repercussions for the rest.

The policy transfer literature warns that imposing policy in this way is far from straightforward. In a recent study , I along with my co-authors have drawn on the policy transfer model developed by David P.

In particular, we examined the extent to which policy transfer was complex, appropriate and complete. But with the minority of the money coming from them, they can only do so much.

IMF officials were most recently suggesting that the eurozone rescue fund should be boosted five-fold if Europe is to avoid defaults by any of its members. The final member of the troika is the central bank of the 17 nations that use the euro - perhaps the most reluctant member. Until last year, the ECB was content to leave the European governments to solve the repercussions of the global financial crisis through political means.

In May , the ECB started to buy Greek bonds in an effort to bring borrowing rates down and calm markets. Since then, it has bought the bonds of all the countries whose yields have shot up on debt fears - Irish, Portuguese, Spanish and Italian debt. This has annoyed German bankers, who have complained of indiscipline. It also means that the ECB is now itself exposed to any eurozone default - indeed, the Germans have already agreed to recapitalise the ECB if there is a run on it.

Although the eurozone rescue fund was created in the second Greek bailout, investors feel that it is already too small to take care of further deterioration in the market. IMF officials have been suggesting that the ECB is the only institution with the "firepower" to soothe markets. They have suggested the aforementioned quintupling of the eurozone rescue fund should come from leveraging the fund via the ECB.

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