Berlin – The troika of international lenders “held a gun to the head” of Cyprus and Portugal and showed little sympathy for social measures, an MEP looking into its work has said.
“Both countries had very little room for manoeuvre in negotiating the terms of the bailouts. What they said basically was that ‘a gun was held to our head’, especially in Cyprus,” Juergen Klute, a left-wing German MEP, told this website.
“And the troika had very little interest in social measures, they were only concerned about cutting back the deficit,” he added.
The German politician said his four-member European Parliament delegation found there was a lack of democratic oversight when it came to the work of the troika – made up of the European Commission, the European Central Bank (ECB) and the International Monetary Fund.
“We are not saying that the reforms imposed on these countries were not needed, but we are criticising the way it was done – with basically no involvement of national parliaments or social partners,” Klute said.
But the social impact was neglected in the German-led rush to hit “Russian oligarchs” who held deposits in the banks, Klute said.
He noted that the current economic situation differs greatly to what the troika and member states predicted when they imposed the bail-in on Cypriot banks.
“There are big problems in Cyprus with liquidity shortage as a consequence of the bail-in. Unemployment has spiked from three to 17 percent, people don’t have money to pay for their loans and mortgages,” Klute said.
He explained that unlike Germany or France, Cyprus does not have a strong social system and people on the island used to put money in the bank to pay for their children’s university studies, for healthcare or to use in retirement.
Full article: Troika bullied Cyprus and Portugal, MEPs say (EU Observer)