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Is it game over for euro bailout Troika?

Monday, June 10, 2013 - 02:26

June 10 - Troika inspectors from the EU, ECB, and IMF are meeting Greek finance minister Yannis Stournaras for a progress visit. But this time the focus is on the Troika itself not just Greece. Since the IMF made its ''mea culpa'' last week over its handling of Greek bailouts some are suggesting it's the end of the road for the Troika? Sonia Legg reports.

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Troika visits to Athens normally put Greece's troubled economy firmly back in the spotlight. But this time the focus is on the Troika itself. Last week the IMF confirmed what many suspected - the European Commission, the ECB and the IMF didn't see eye-to-eye on the rescue packages they designed. The report has left many believing it's time the Troika sought a new manager. ETX Capital's Joe Rundle. (SOUNDBITE) (English): JOE RUNDLE, HEAD OF TRADING, ETX CAPITAL, SAYING: "They have really no credibility in the way that they act. They manage to make situations that could be solved relatively easily very difficult, and by that I mean Cyprus, so I think there will probably have to be a structural reform in the way that Europe deals with its problems." The Troika was assembled in haste in 2010 after Greece's public debt exploded with the familiar consequences. It went on to handle bailouts for Portugal and Cyprus as well. The new IMF study of the Greek programme suggested the Troika made over-optimistic growth forecasts and massaged debt numbers, due to pressure from the euro zone's political leaders. Greek GDP, for example, fell 22% between 2009 and 2013 instead of a predicted 3.5% while unemployment hit 27% rather than staying below 15%. The amount of money which could be raised from selling state assets was also over-optimistic. That was compounded on Monday by Gazprom's withdrawal from a deal to buy DEPA - Greece's natural gas company. It's hard to quantify the damage caused by the Troika and there's still disagreement over whether European governments should write off some loans to Athens. (SOUNDBITE) (English): JOE RUNDLE, HEAD OF TRADING, ETX CAPITAL, SAYING: "I think the biggest risk to the euro zone is a country like Greece or Portugal saying we don't want to be part of you anymore and stepping away. And while they have a huge amount of debt that seems completely unsustainable and never ending I think that pressure will slowly increase." The IMF isn't the only body with misgivings Some ECB stakeholders - particularly those in Germany - are worried about potential conflicts of interest if the central bank remains part of the Troika. It's already back-stopping euro zone government debt and will soon be supervising the banks that lend to them. One IMF source told Reuters the Troika was like a soccer team with no manager and no idea who plays where.

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Is it game over for euro bailout Troika?

Monday, June 10, 2013 - 02:26