The Sovereign Debt Crisis, the EU and Welfare State Reform by Caroline De La Porte;Elke Heins;

Author:Caroline De La Porte;Elke Heins;
Language: eng
Format: epub
Publisher: Springer Nature

The MoUs have been characterized by very strong surveillance, with their policy content being controlled (negotiated and agreed) ex ante and ex post. Every version of the MoU has been accompanied by a detailed timetable of actions that had to be taken by various government departments. Under the conditionality programme, there is a provision for the Troika to visit the country every three months to monitor whether or not the agreed measures have been implemented according to the schedule laid down in the MoU and to assess the impact of measures taken against the fiscal targets. In the event of inaction, delay or undershooting of targets, new and/or complementary remedial measures are supposed to be agreed on with the national government as a condition for a recommendation by the Troika to the Eurogroup that it continues financially supporting the member state. Our study of the MoUs has suggested that surveillance became tighter and lengthier whenever the implementation of the programme either stalled or failed to deliver the desired results (see Table 5.2). This has been the case more frequently in Greece. On the one hand, after the launch of the second programme, the European Commission services started reporting in between the regular quarterly reviews of the MoU on the compliance with ‘milestones’ in the programme. These assessments were used to authorise the disbursement of ‘sub-tranches’ of the tranche of financial support that the Eurogroup had already approved. Surveillance was thus stepped up in excess of the already tight controls established in the MoUs. On the other hand, the ex ante evaluation of the programme to be followed became more meticulous and protracted in both Greece and Portugal whenever the results of adjustment were such as to suggest that the programme might become subject to a financing gap.Table 5.2European Commission-DG ECFIN for MoUs and review dates

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