Strikingly different verdicts on the crisis rescue work of the EU Commission/ECB/IMF Troika were voiced by business and trade union representatives at a European Parliament inquiry hearing on Monday. The Troika reforms were the sole and unavoidable option at the height of the crisis, said Business Europe. Some of the Troika's work was very poor and had led to dramatic effects on workers, countered the European Trade Union Confederation (ETUC).

Many MEPs focused on how the social partners could be more extensively involved in shaping future rescue efforts. Responding to comments by James Watson, Business Europe's representative, they also demanded why emphasis should continue to be placed on reducing labour costs. Other MEPs asked what more could be done to address small firms’ concerns and especially access to finance. Finally MEPs highlighted the Troika’s apparent disregard for the widely-held view that social dialogue is vital to a healthy economy.

 Damning indictment

In her replies, ETUC representative Veronika Nilsson argued that the Troika’s reform recommendations had been too far-reaching, in many cases even breaching social dialogue tripartite agreements already in force. This fact, combined with a lack of transparency and accountability and a mistaken focus on internal devaluation through reducing labour costs, meant that the Troika had mostly missed the target, driving debt levels ever higher and depressing recovery prospects, she said.

No alternative

Watson conceded that the economic adjustments had been "very challenging", and that high unemployment was a serious concern. He also acknowledged that the weakest were made to shoulder an unfair share of the burden of reform. But at the time, the only way to obtain crucial funding was through the Troika. In its absence, there would have been far more damaging defaults, he stressed.

Looking ahead

Looking ahead, Watson stressed that a key goal must be to improve firms’ access to finance which would in turn enable them to help reduce unemployment. Nilsson called for the memoranda of understanding signed with countries receiving financial aid to be revised in order to cushion the effects of austerity and ensure respect for fundamental human rights. She stressed that the Troika must be made more accountable, and pay more attention to social dialogue.

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