Moscovici: Greek bailout was scandal for democracy
Some European leaders are finally speaking out against the logic of "we had to destroy the village to save it":
“It is a scandal in terms of democratic processes, not because the decisions were scandalous, but because by deciding in this way the fate of a nation, imposing detailed decisions on pensions, the labor market,” Moscovici told Corriere della Sera.
Moscovici also criticised the Eurogroup’s structure, hinting that the decisions made by technocrats are not transparent and accountable to any parliament.
Is the French Commissioner Pierre Moscovici in the midst of a power-grab? In an interview with Politico’s Ryan Heath, and after having participated in over 80 Eurogroup meetings both as French finance minister and European Commissioner, Mr Moscovici makes it clear that the Eurogroup needs deep reform. He goes as far as stating that, had the Eurogroup been more open and more transparent, it would have taken “better” decisions. He also admits that he would like the role of Eurogroup President very much, and has for years been preparing for it – all while politely making it clear that only his successor is likely to benefit of these reforms and become an “EU Finance Minister”.
Extensive write-up of Varoufakis' negotiations with the Eurogroup in 2015:
That May, the troika institutions agreed to lend Greece a hundred and ten billion euros. Germany’s direct contribution was more than twenty billion. That bailout, and a subsequent additional loan of a hundred and thirty billion euros, came with three kinds of obligation: Greece needed to privatize state assets, such as Athens’s port; reform institutions and practices perceived to be inefficient, including its health-care and welfare systems, in ways likely to result in mass dismissals; and adjust its budget through further tax increases and spending cuts, to the point where Greece’s income significantly exceeded its spending on everything but its repayments. In an economy without growth, such a surplus becomes a measure of austerity. The target was 4.5 per cent of the country’s G.D.P.
Criticism of these arrangements, largely shaped by Germany’s demands, is now widespread, and unites Paul Krugman, the economist and Times columnist, Norman Lamont, the Conservative former British Chancellor of the Exchequer, and analysts at the I.M.F. The bailouts turned an unmanageable private debt into an unpayable institutional debt. Although the new loans were largely long-term and low-interest, they carried provisions that intruded on the everyday spending decisions of the state and, in the opinion of many observers, crushed hopes of economic growth. Writing at the time of the first bailout, Varoufakis described it as punitive—a rerun of the Versailles Treaty, this time with Germany as the enactor, rather than the victim, of economic retribution.