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Critics of the Troika
The consequences of the decisions taken by the European Troika resulted in many negative comments both within the European institutions as well as at national levels. The European Parliament was excluded from negotiations and therefore decided to establish a special committee of inquiry led by the Austrian centre-right MEP Othmar Karas in order to analyse the level of the Troika's accountability. According to the findings of the committee, the Troika's members had totally asymmetric distribution of responsibilities between them. In addittion, differing mandates together with varying negotiation and decision-making structures only led to more divisions and made it difficult to find a common approach. As said the British MEP Sharon Bowles, the response to the crisis lacked transparency and necessary credibility. In fact, the Troika did not have any legal basis at all because it was established as an emergency solution. However, a German politician Norbert Lammert stated that in his view it was incorrect to discuss the lack of democratic legitimacy of the Troika since the adjustment programmes had been approved by the parliaments of Ireland, Portugal, Cyprus and Greece. But when the parliaments approved those programmes, they did not know what implications it might bring. The Troika interventions generated long-lasting political damage not only for the European Union but also for its member states themselves. Many European citizens claimed that the budget cuts resulted in the eurozone's longest recession since the creation of the single currency back in 1999. During that period, there were also disagreements concerning the efficiency of the Troika as such but the ECB president Jean-Claude Trichet tried to reassure people and highlighted the fact that "if nothing had been done for Greece, the impact of the crisis would have been undeniably worse for this country". As it turned out, the Troika underestimated the impact of austerity policies on economic growth. Another problem was in the different philosophies in relation to economic policy across the EC, the ECB and the IMF according to the European Commissioner in charge of economic and monetary affairs Olli Rehn. Whereas the IMF advocated for more robust debt relief, the EU insisted on more limited option. The European institutions prioritised the maintenance of the cohesion and protection of own rules. Apart from that, the members of Troika could not agree upon potential risk of financial spillovers across member states of the eurozone. For the European institutions this was a very sensitive topic this is why they wanted to avoid debt restructuring. If only the Troika paid more attention to cross-country spillovers and deteriorating conditions, the implications could have been less harmful. The academic community criticised the Troika as well accusing it of having an immense power and pursuing a fiscal conservatism approach. Based on the case study, scholars came to the conclusion that austerity policies in Greece were more brutal rather than in Greece putting an emphasis again on the political and socio-economic consequences as administrative reforms, unemployment, emigration, serious deterioration of citizens's physical and mental health ,