Greek Finance Minister Yannis Stournaras was very critical of the Troika during his meeting with members of the European parliament, who are monitoring the activities of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) task force operating in EU member states.
Stournaras talked about the significant miscalculations and mistakes that were included in the first bailout package, which had devastating financial and social consequences, while causing delay to Greece’s debt restructuring. There is still an ongoing effort to correct these mistakes with the second bailout, however it is not easy, he said.
In the meeting held with MEP’s Othmar Karas and Liêm Hoang Ngoc, who supervise the European parliament’s Troika monitoring committee, and SYRIZA member of the Greek parliament Nikos Chountis, the minister focused on the incorrect fiscal multipliers used by the Troika. These eventually led in 2012 to a deep recession with a 6.4 percent cut in GDP, a rate which was much worse than that predicted by Greece’s creditors.
The country’s creditors had estimated that Greece would be in growth by 2012, highlighted Stournaras. Futhermore, the Troika’s initial assumption was that the Greek debt would decrease rapidly after 2013, which of course has not happened as the original loans made to Greece by its EU partners had very high interest rates.