There is too much austerity, says European commissioner

on 25/10/2012 00:00:00

He was responding to statements from Siptu and the social partners that meeting the troika was fruitless, as they resisted efforts to have them change their approach to the economic crisis.

Mr Andor, an eco-nomist, said he got a fresh understanding of the situation in Ireland from meeting the social partners in Brussels and during his visit to Dublin recently. While relatively good progress had been made on the programme, judging from some of the headline figures, there were unwelcome social consequences, such as the number of young people emigrating from Ireland.

"We are aware of this and I am personally convinced there is too much austerity and there is a need to find a better way to reconcile fiscal consolidation and recovery," he said.

Referring to direct recapitalisation of banks he said he hoped that the changes on the table moved forward and not backward.

The troika, which is currently in Ireland assessing if the country is meeting the targets set out in the programme, should be answerable to national parliaments and to MEPs, Labour MEP Nessa Childers said.

"There is an ideology underpinning the troika's approach to Ireland and other programme countries, that cutting back on investment and services will result in economic stability. We are in danger of a situation where states under the direction of the troika are being consigned to decades of austerity and recession.

"Their approach has been challenged by both ICTU and Social Justice Ireland, and I believe this strengthens the case for more accountability and transparency around troika decisions."

She said the European Parliament should have a veto over the appointment of troika chiefs, with regular reports to the relevant parliament committee, which would have the right to audit troika actions.

"Parliament should ensure that troika respects core EU principles, including social justice, social cohesion and subsidiary," she told the European Parliament.

Mr Andor announced a plan to create a European fund worth €2.5bn for the period 2014-2020 to help the EU's most deprived.

"The social crisis has taken a terrible toll on the most vulnerable people in European society. As a result, the situation is getting worse, not better," said Mr Andor.

Highlighting the need for the fund, he pointed out that there were 40m people in Europe suffering from food deprivation and at least 4m homeless. There are also 25.4m children in or at risk of poverty in the EU, while 5.7m children must wear second-hand clothes.