EU parliament damns troika record

Labour MEP for Ireland South, Phil Prendergast, has supported the European Parliament’s very critical findings in its in-depth inquiry into the EC/ECB/IMF Troika’s bailout programmes.

Prendergast called for the abolition of the Troika model, urging EU government leaders to make good on their two-year old promise to retrospectively recapitalise Irish banks through EU funding.

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Speaking from Strasbourg today, Prendergast said:

“The Troika may have been set up as an emergency mechanism in the face of a crisis the EU was unprepared to deal with, but most of its mistakes were the product of conservative economic dogmatism, not haste.

“This explains why the EU heads of government have so far failed to deliver on their promise, made two years ago, to allow Ireland to recover its bank bailout legacy costs, through the European Stability Mechanism.

“I find it extraordinary that conservative members in this house still insist, today, that public debt played a bigger role than the banking collapse in the Eurozone crisis.

“This belief led to a punitive austerity strategy that the European Central Bank helped impose on national governments, when it should have no business dictating budgetary policy.

“It is ironic to see how the ECB zealously guards its independence, while eagerly circumventing national and European budgetary decision-making by elected representatives to protect the financial sector.

“This approach culminated in executive decisions to save banks at all costs, saddling citizens with taxes, less social supports and cuts to public services.

“This was made worse by European debt and deficit ceilings that could well have been plucked out of the same place Anglo-Irish bank executives found the misleading figures they presented to the Irish Central Bank.

“The International Monetary Fund has admitted it underestimated the impact of austerity measures, and recently acknowledged its failure to find a magic threshold of debt that must be swiftly slashed, no matter the human cost.

“The Commission must learn these lessons or be replaced with a new one. The future of Europe and the welfare of our citizens depend on this.”