Socialist MEP leader: Troika ‘locusts’ cannot save Greece

Hannes Swoboda MEP large.jpg

Socialist members of the European Parliament have set up an "alternative Troika" to find solutions for Greece beyond austerity measures, with their group leader going as far as likening the current task force to "locusts". The socialists' concerns about Greece were largely echoed by other political group leaders in the Assembly, EURACTIV France reports from Strasbourg.

Only a few months ago, voices hostile to the 'austerity alone' cure for Greece were rare in the European Parliament.

However, images of the streets of Athens in flames shocked many when they were broadcast last Sunday (12 February), at the same time as the Greek Parliament adopted the new austerity plan demanded by the Troika (see Background).

Hannes Swoboda, the Austrian MEP and newly elected leader of the Socialists and Democrats (S&D) group in the European Parliament, said yesterday (15 January) that his group would create its own 'Troika' to visit to Greece and create their own alternative plan.

Troika 'locusts'

The leader of the Parliament's second-largest group did not mince his words. "We have seen what locusts like hedge funds can do in the economic world. We cannot allow another swarm of locusts such as the Troika … to descend on the country and impose their ideas," he said.

"This would amount to a dictatorship and not co-operation with a country which is part of the European Union."

Instead, Swoboda called for something similar to a 'Marshall Plan' for Greece. The Socialist 'Troika' will be made up of Socialist MEPs Elisa Ferreira of Portugal, Robert Goebbels of Luxembourg and Ivailo Kalfin of Bulgaria.

The troika reference comes from the three institutions overseeing aid for Greece – the European Commission, European Central Bank and International Monetary Fund.

Guy Verhofstadt, a Belgian MEP and the leader of the Liberal Group, presented an earlier alternative 'Hercules Plan' for Greece last June.

Greens plead for 'forgiveness of sins'

The rhetoric of the Greens in the Parliament has also radicalised. "We are imposing brutal 'degrowth' on Greece which no one would have been able to live with," said co-leader of the group and French MEP Daniel Cohn-Bendit.

"Today a plan must be found to annul this debt, to reform state institutions, and create a Marshall Plan."

Cohn-Bendit added in his traditional thunderous style that Greece had forgiven some €60 billion of German war debt even though the country had "destroyed Europe".

The Greens' other leader, German MEP Rebecca Harms, had a similar tune. "After the Second World War, the Germans only succeeded because their sins were forgiven," she said.

Greece going 'straight into the wall': EPP leader

Worry on the consequences of austerity is also palpable among in the centre-right European People's Party (EPP), the largest group in the Parliament.

"We cannot cut salaries by 10%. We have to think differently otherwise we will go straight into a wall," said French MEP and EPP leader Joseph Daul. "The current package that has been presented does not measure up to the stakes. There need to be proposals for growth and jobs."

There are few sources of growth that the country can rely drawn upon however. When questioned by journalists, French MEPs of both the left and right were somewhat vague in their prescriptions.

"There needs to be more authority over the Greek government and Europe must not be limited to teleconferences," said MEP Jean-Paul Gauzès (EPP). He also advised for an increase in tourism.

As a member of the eurozone, Greece cannot devalue its currency to make it an economically more attractive destination for foreign holiday-goers. Many economists have long warned that Greek withdrawal from the euro could provoke a continent-wide financial crisis.

Neelie Kroes, the European commissioner for the Digital Agenda, sparked significant media buzz last week when she suggested the eurozone could survive Greece's secession. Other EU officials were quick to distance themselves from her comments.

Eurozone finance ministers and the Greek government have been at loggerheads for weeks over economic reforms demanded by the so-called Troika (European Commission, International Monetary Fund and European Central Bank) in order to grant a new €130-billion bailout package.

Without this loan, the country is almost certain to default on its massive debt, which has reached over 140% of GDP.

Greek Finance Minister said on 15 February that a teleconference of eurozone ministers had "clarified" how to reduce the Greek budget by €325 million in 2012. Other details still need to be determined before a summit of Eurogroup summit next Monday.

Some economists worry that the current mix of austerity and loans will nonetheless lead the country into further recession and ultimately default.

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