Barroso says European bailouts could bypass IMF in future
European institutions will be able to manage financial aid programmes to member states in the future, European Commission head Jose Manuel Barroso said Thursday, a move that would remove the IMF from any eventual bailouts.
“In the future, and I must stress in the future, I think that it will be possible, if governments want it, for European institutions to fully assume their responsibilities in managing” any financial assistance programmes, Barroso told Portuguese media during a visit to Brussels by Portugal’s President Anibal Cavaco Silva.
He added however that it would not affect the ‘troika’ of creditors — the European Union, the European Central Bank and the International Monetary Fund — which oversee the current bailouts to eurozone debt-wracked Greece, Ireland, Cyprus and Portugal.
The relationship between the EU and IMF has occasionally been fraught, with the latest friction caused by an IMF report last week that criticised EU leaders for not being able to make tough decisions in Greece’s first bailout, ultimately requiring a second rescue.
Barroso made his comments in response to journalists’ questions about comments by Cavaco Silva that it was necessary to rethink the ‘troika’.
“I think it is time to rethink the composition of this team… because the goals and the vision of the International Monetary Fund do not coincide with the goals and vision of the European Union,” the Portuguese president said on Wednesday.
The decision to bring the IMF into the European rescue programmes was controversial, but its expertise and credibility were widely seen as necessary after EU fiscal monitoring failed to head off the crises.
Barroso said “it would be counterproductive to proceed with some sort of reformation of the troika” while rescue programmes were still underway as the countries “have been given clear requirements which must be respected.
“But in the future yes, it’s possible. That will depend on the desire of the member states”, which “make the final decisions concerning adjustment programmes” recommended to countries receiving financial assistance, he added.
Since May 2011 Portugal has received loans under a 78-billion-euro ($104-billion) bailout for which the troika has demanded that the government institute an austerity programme to reduce its deficit and revive the economy.