Frequently citing the example of Greece with its high unemployment, the complete collapse of the labour market, the closure of businesses and the increase in poverty, the report accuses the troika and national governments of ignoring the European Social Charter, employment conventions as well as EU treaties.
The Committee for Employment and Social Affairs voted to back the report yesterday with 27 votes in favour, 7 against and two abstentions.
Among the basic conclusions are that the major losses in jobs, the mass closures of small and medium businesses (SMEs) and the increase in the number of people at risk of poverty are the three most significant consequences of the policies of austerity which the troika imposed on Greece, Ireland, Portugal and Cyprus. New forms of poverty had also been created affecting middle and lower middle class families many of whom are no longer able to keep up with mortgage payments or afford the high cost of fuel.
“The arrogance of economic fixation has made policy makers forget that there are conventions which you must stick to … even in a crisis you can't reduce pensions below the breadline,” Mr Cercas is reported to have told reporters following the vote.
“It's time for employment and these social benefits which have been destroyed by structural reforms need to be brought back. Budgets are now balancing and we need to bring back those who have been left behind,” he added.
The report issues a call for member states to implement a recovery plan for Memorandum countries that will correct the errors made. In particular it says that measures to support SMEs and vulnerable members of society must be implemented and measures to reverse the employment trend.
Mr Cercas called a 6 billion euro fund to support young people ‘insufficient’, saying that it needed to be increased to 20 billion.
The Cercas paper supplements a similar report by the economic affairs committee. That report’s co-rapporteurs MEPs Othmar Karas and Liem Hoang Ngoc have called for the troika to be consigned to history and replaced by a different system directly accountable to the European Parliament.
The amalgamated text will be voted on by the full European Parliament in March although even if it is passed, it will not be legally binding.
Furthermore despite the anger of MEPs at the troika’s lack of accountability there is disagreement over when it should be dismantled. The center-left Socialist and Democrat MEPs are pressing for it to be disbanded before the end of Greece’s EU presidency, whereas the center-right EPP group prefers a less rigid time frame.