Troika (European group)
The term Troika has been widely used in Greece, Cyprus (Greek: τρόικα),[1][2] Ireland,[3] Portugal,[4] and Spain[5] to refer to the consortium of the European Commission, the European Central Bank and the International Monetary Fund that provided a bailout to these states since 2010, and the financial measures and government policies that the three institutions have demanded to be implemented in return by Greece and the other nations concerned.
The political impact of the austerity imposed on countries of the EU periphery, which were confronted with significant debt, led to "a predominant economic and social dislocation".
[9] In 2015, the GDP of Greece remained stagnant compared to 2009, and the loans appeared to be insufficient to achieve the fiscal goals fixed by the Troika: 90% of the amount paid interest.
[citation needed] The term ‘troika’ has its origins in the Russian word for a three-horse carriage, but it is also used to describe an informal alliance between three actors.
When the three organisations offered assistance, the necessary measures and reforms were imposed in the form of a Memorandum of Understanding between the Troika and the Member States concerned.
In the months leading up to the euro crisis, the IMF already had concerns that countries in the European periphery would be a potential threat to the other major financial markets in Europe via their commercial banks’ balance sheet exposures.
[20] Formally the European Central Bank (ECB) does not participate in the decision-making of the programme, these decisions are taken by the IMF and the Finance ministers of the Member States.
Its second role is the one where the ECB changes collateral policy and large-scale medium-term liquidity creation to encourage markets to invest in higher-yielding government bonds.
[21] The ECB also provides advice and expertise on a broad range of issues relevant to the monetary policy and the financial stability of the eurozone countries.
The European Parliament was excluded from negotiations [22] and therefore decided to establish a special committee of inquiry led by the Austrian centre-right MEP Othmar Karas[23] in order to analyse the level of the Troika's accountability.
In addition, differing mandates together with varying negotiation and decision-making structures only led to more divisions and made it difficult to find a common approach.
[29] During that period, the efficiency of the Troika was another cause of concern but the ECB president Jean-Claude Trichet tried to reassure people and highlighted the fact that "if nothing had been done for Greece, the impact of the crisis would have been undeniably worse for this country".
[35] Scholars such as Kevin Featherstone, Judith Clifton, Daniel Diaz-Fuentes and Ana Lara Gómez came to the conclusion that austerity policies in Greece were more harsh than in Ireland, emphasising political and socio-economic consequences, specifically unemployment, emigration, and deterioration of citizens' physical and mental health.
[36][37] Other critics of the Troika are Yanis Varoufakis, a former Greek finance minister,[38][39] German writer Fritz R. Glunk, and Noam Chomsky.
The "troïka" represented the European Union in external relations that fell within the scope of the common foreign and security policy (CFSP).
