A report by the EU's Court of Auditors (ECA) this week included no less than 10 recommendations to the EU Commission in order to improve its institutional role vis-à-vis memorandum bailouts and to ensure that such bailouts are effective, a development directly linked with the first two bailout programs implemented in Greece.
The recommendations were included in a report, released in Brussels, that included scathing criticism over the effectiveness of the first two (out of three) memorandums imposed on Greece,in exchange for loans by institutional creditors to avoid a sovereign bankruptcy.
One example cited by the ECA to qualify the negative portions of its assessment is that Greece has still not fully returned to sovereign capital markets in order to cover its borrowing needs, while measures to deal with a ballooning debt have failed.
Among others, the ECA called for:
- An improvement in the process for planning support programs (bailouts)
- An improvement in the way necessary measures are determined, in order to avoid inequalities
- Guarantees that the programs are part of an overall growth strategy, in each country applied
- Listing specific performance indices to ensure that the correct evaluation of the programs
- Better action, from the beginning of a program, to deal with possible gaps in terms of economic data
- Seeking an agreement with partners involved in a program so that each party’s role is determined with clarity and transparency
- Improved corroboration of suppositions on which a program is based
- A more systemic evaluation of a member-state’s administrative competence in implementing reforms
- Improved research in terms of planning a program
- Interim evaluations of successive programs exceeding three years, and finally
- Deciding on the best framework for allocating support and exercising supervision after the end of the bailout programs.
