Goodbye to the Greek Bailout Troika: EU-IMF May Be Replaced

Written by | Wednesday, February 4th, 2015

The European Commission has confirmed that there is a possibility that the trio consisting of the two EU institutions – the Commission itself and the European Central Bank – together with the International Monetary Fund (IMF) could potentially be replaced. The controversial troika is in charge of the supervision of Greece’s bailout program, carrying out regular checks of the country’s commitment to keep prescribed policies.

As Greece’s newly elected left-wing government is opposed to the troika’s agenda, it aims to renegotiate the condition of the bailout and reach a major reduction in Greece’s debt. On Monday (2 February), Commission’s chief spokesperson, Margaritis Schinas, quoted Jean-Claude President Jean-Claude Juncker as saying that “in the future, we should be able to replace the ‘troika’ with a more democratically legitimate and more accountable structure, based around European institutions with enhanced parliamentary control both at European and at national level”. Mr Schinas, however, also stressed that the EU needed a very “clear understanding” of the Greek position.

The new Greek Prime Minister and the leader of the winning party, Syriza, is going to hold talks with Commission’s President Juncker tomorrow (4 February). Syriza won the Greek parliamentary elections on 5 January promising its voters to reject the troika and withdraw many of the austerity measures imposed under the bailout program run by international lenders. The country still has a debt of about €315 billion, which is roughly 7 percent of its gross domestic product. According to the Commission, the existing bailout program is a “contract” whose revision would imply “the unanimous agreement of all 19 members of the eurozone”. Greece’s current program of loans ends at the end of February and there is no deal yet on how the last bailout tranche of €7.2 billion would be disbursed.

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