Our View: Far from colonial force, Troika actually doing some good

EVERY time the representatives of the Troika arrive in Cyprus we hear the same litany of complaints from our wise politicians and union bosses about austerity measures, neo-liberal policies and lack of funds for development. We always hear the same cliché that ‘austerity does not work’ and that ‘we need a development policy to create jobs’. What they fail to mention is that we also need money to undertake development projects and the fact is that we do not have money. International lenders gave our indebted state €10 billion in loans to avoid bankruptcy not to finance development projects.
But deputies have still not come to terms with this reality. This is why they all come up with statements like the one made on Thursday by EDEK’s Nicos Nicolaides after a meeting with the Troika. “The memorandum could have improved some numbers, theoretically, related to the Cyprus economy, but it has not helped Cyprus take any substantial step for an exit from the crisis,” he said. Most deputies have been promoting the myth that the purpose of the memorandum was to kick-start our economy, knowing full well this was never the case.
The reality is that the Troika is not here to help us make a quick “exit from the crisis.” It is here to make us put our dysfunctional economy on a sound and healthy basis, so there would be growth and we will be in a position to repay the €10 billion we were given by the international lenders to avoid bankruptcy. We will exit the crisis when the economy is healthy again, but our politicians pretend they cannot understand this.
Nor do they seem able to understand that unless the issue of the NPLs is effectively tackled by the banks the door to recovery will not open. This point was highlighted by the Troika technocrats at Thursday’s meeting with the House finance committee at which they stressed the need for lifting all legal obstacles to foreclosures. They, reportedly, also voiced strong opposition to the AKEL-EDEK bill, aimed at protecting the primary residence, as it would encourage borrowers not to repay their loans and exacerbate the NPL problem.
But there has been little progress on the NPLs because the businessmen, who stand to lose the most, still wield great influence over the politicians who have managed to reduce this to an issue about protection of primary residence, which it is not. The Troika had always made it clear that primary residences could be given a reasonable grace period before they were subject to foreclosures. The government has been dragging its feet over the drafting of legislation that would enable banks to deal with NPLs. It is as if nobody apart from the Troika sees the direct connection between bank loan recoveries and bank liquidity, deluding themselves that banks would become liquid again by some miracle. Yet the truth is that unless the NPLs are drastically reduced there will be no exit from the crisis.
As we have said on many occasions, the country is much better off heeding the advice of the international lenders than that of our politicians who are primarily responsible for the mess we are in. In fact, we would go as far as to say that these supposedly heartless technocrats that are only interested in numbers have tried to do more for the poorest members of our society than our so-called caring politicians. If we do have a national health scheme offering universal care by next year it would be thanks to the persistence of Troika technocrats, who also ended the scandal of free healthcare for public employees.
The introduction of the state’s ‘minimum guaranteed income’ for all citizens from this July – a necessity in times of rising poverty and deprivation – was also a Troika suggestion, the only condition being that additional funds needed would have to come from the state budget and not from more borrowing. These major policy initiatives supporting the most vulnerable members of our society have been undertaken by the government on the suggestion and (in the case of the national health scheme) persistence of the neo-liberal Troika.
We may even have a modern, viable state that looks after all its citizens – not just public employees – as well as functioning banks by the end of the financial assistance programme. The Troika may have been accused of acting like a colonial power, but it seems to be doing more good to the country than our political parties have ever done.