1st newsletter of TroikaWatch

In this newsletter you can read about:

Overall situation

The last months of the year are traditionally the time when national parliaments vote on the budgets for next year. Like in the years before, in many countries deep cuts in social services and further privatizations are planned. Despite good-sounding news from and for the financial markets, austerity for ordinary people continues. This might not be by accident.

When this newsletter is sent out, Ireland will be the first country that exits a Troika program. Unfortunately, the difference for the people will not be that big, because austerity continues. The same counts for people in other countries like Spain or Portugal, who want to follow Ireland on this path. Any country that believes it can get out of the crisis by austerity, will have austerity forever.

The current situation is characterized by a Troika that still pushes for even more austerity and by governments that are doing window-dressing by claiming to see a positive development for the times ahead, which will never become reality if the current policy is continued. Neither in the Troika nor in the national governments, talks are about what should really be on stage: a significant debt relief in many countries – not only for the public, but also the private sector -, a restoration of public services and significant investment for facing some of the great challenges of our time, such as climate change and energy shortage.

By publishing this newsletter with reports from the countries affected by the Troika, we hope to be part of a growing movement that one day will be able to change this.


When the Troika left its review mission for Greece in November, there was a big dispute about the numbers in the foreseen budget for next year. The Troika estimates the deficit of the budget at least 1 billion euros higher than the government does. In the meantime, the Greek parliament voted for the budget without the consent of the Troika. Troika seems to intend to postpone all important decisions and pressure about the Greek Memorandum to avoid a political crisis in Greece in the next six months: the Greek government could lose its tight majority in the parliament and fall, provoking general elections. This risks indeed to disturb the EU Presidency agenda (Greece delivers an European president in January, for six months) at a politically sensitive moment (European elections). So, after a lot of noise and threatening to postpone further negotiations about the payment of the next bailout tranche to the beginning of next year, the Troika calmed down and returned to Athens on the 10th of December.

Further delays and additional deficits will worsen the debt situation, because those have to be financed with additional short term credits from the financial markets, for which Greece has to pay much higher interest rates than for Troika loans. Neither the additional cuts demanded by the Troika nor the window-dressing by the Greek government can lead the country out of the crisis.

Even without further cuts demanded by the Troika, next year will again be a disaster for many people in Greece. At the end of the year, a ban on home foreclosures runs out and there is a dispute with the Troika on if and how it should be renewed.

While the country still suffers from an official unemployment rate of 27 per cent, there are more layoffs planned. To fulfill the demands of the Troika, the Greek government agreed to fire an additional number of 14,000 employees in the public sector next year.

There are strikes in universities, the health care sector and ministries, where many of these dismissals could take place, and protests by teachers, who are affected by planned closings of schools. Besides that, mobilizations by trade unions and students took place during the visit of the Troika in November and before the voting of the budget in parliament.

With the Greek winter now starting, the high prices of energy again become a problem for many people. In northern Greece, the first schools had to shut down because of lack of money for heating. Many people try to heat their homes by burning wood, because they were cut off from the electricity net for not being able to pay the bills.

In the last weeks, at least three people died by breathing in the poisonous carbon monoxide, or got burnt to dead in house fires. The price of electricity has increased by 59 per cent since 2007, while the income of the poorest 10 per cent of Greeks was in 2012 less than half of what it was in 2009. In many cities, people form comittees of solidarity that organise the sharing of electricity, in an act of civil disobedience.


In December, Ireland became the first country that agreed to exit from its Troika agreement, without any additional precautionary loan or guarantee – something that had widely been assumed necessary. The Irish government is that way boldly signaling its ability to continue without external aid. However, this may be rather a message than actual reality. Ireland will still be subject to surveillance of its ‘progress’ on implementing reforms by all three of the Troika bodies, on a six-monthly basis (under the Troika agreement it was every three months).

While the Troika and the government are doing their best to promote the return to the markets as a success story, the reality of the people in Ireland looks quite different. In its final report, the Troika criticizes the failure of the government to reach the target of planned cuts in the health sector – by 200 million euros instead of the promised 600 million euros. In the budget for 2014, the government plans to reduce the deficit by a further 2.5 billion euros; the health care sector is one of the biggest posts that are targeted. For example, the Irish medical card system (holders of this card get free medical treatment) will be reviewed: the government aims to reduce the number of people eligible for this program. Furthermore, while people now get sickness benefits after three days, this period should be increased to six days.

Since the outbreak of the crisis, the number of unemployed has nearly tripled from 107,000 to more than 296,000 people. Public debt raised from 91 per cent of GDP in 2010 to 121 per cent in 2013. Household debt raised to 200 per cent of GDP, while the value of assets for which the debt was created in the first place, has halved since the outbreak of the crisis.


Similar to Ireland, Portugal intends to come back to the financial markets as well. To achieve this, the government is willing to pay a high price. At the beginning of December it made a debt swept, postponing the payment of debts due in 2014 and 2015 for three years. This will cost an additional 290 million euros in interest in the next two years.

In the 2014 budget, the government plans cuts that count up to 3.9 billion euros, which is equivalent to 2.3 per cent of the Portuguese GDP. Wages in the public sector should be cut between 2.5 per cent (wages from 675 euros per month) and 10 per cent (wages above 2.000 euros per month), while working time should be raised from 35 hours to 40 hours a week.

Next to that, the government intends to reduce all pensions above 600 euros a month by 10 per cent, but it is still in consultation with the constitutional court about approval, since this court already rejected a similar measure some time ago. In contrast to the cuts that ordinary people suffer from, companies are helped by the government as their tax rates will be decreased.

At the beginning of December, Portugal sold 70 per cent of its mail service, a profitable public company, to the stock markets. Further privatizations are planned for the water company and the national airline company TAP.

There are discussions between the Troika and the government about the minimum wage and wage bargaining. The Troika demands a lower minimum wage and further liberalization of the labor market, which is something that even Portuguese employers rejected as they fear a further drop in domestic demand. While the government claims to see light at the end of the tunnel, the latest statistical figures from September say that domestic demand in Portugal was down 1.5 per cent, investment 3.3 per cent and consumption 1.2 per cent compared to the same time last year.

When the parliament voted on the budget, a mass protest took place in front of the building, where people demanded the resignation of the government. One week before that, police officers protested against cuts and workers of the mail services started a strike against the privatization of their company.


In order to get the next tranche from the Troika, the Cypriot government had to prepare a plan for privatization of state enterprises by which it should earn 1.4 billion euros. According to this plan, the telecommunication company, the electricity company and ports should be privatized before the end of June 2016. Trade unions held protests against these plans. On the 14th of December, trade unions organised a mass rally.


Despite a warning under the new Two Pack legislation which requires countries’ budgets to be ‘approved’ by the European Commission, Spain claims to have completed all necessary reforms for its EC loan package and that its banking sector is ‘improving’ so much that it will not take up the remaining emergency funds that were made available. As with Ireland, the other celebrated ‘exit’, Spain will continue to have to submit to six-monthly monitoring of the progress of its required reforms, until 75 per cent of the emergency lending provided by the EU (41 billion euros of a 100 billion euros package) is repaid.

After a constitutional reform to prioritize debt repayment over people’s rights (promoted by the Troika and without any social consultation) the government started to implement privatizations in the public sector and cuts in essential public services such as education, health care and social services. Retirement age has been delayed, living conditions worsen, pensions have been frozen and labor rights cut.

Spain has seen many big mobilizations against austerity in the last years and civil society is organising and taking action. Examples are: citizen platforms succesfully preventing house evictions or auditing debt, workers struggling in the health care or education sectors and collectives fighting cuts and corruption through the courts. In response, the government is now planing a new anti-protest law to criminalize protests (with fines of up to €600.000).


Like Spain, Italy has come under pressure from the European Commission to re-assess its national budget under the new Two Pack-legislation, which gives the Commission the right to conduct surveillance and perform analysis of planned national budgets. EU commissioner Rehn stressed that Italy needs a debt structural adjustment equal to half a percentage point of its gross domestic product, while it is currently only at 0.1 per cent. The consequence from the point of view of the Commission is that the country does not qualify for the EU’s “investment clause” that would allow it to exclude some public funding from its budget deficit calculations, because the government’s spending plan will not cut Italy’s national debt fast enough.

On Monday the 9th of December, thousands of farmers, lorry drivers, pensioners and unemployed people took the streets in Italy as part of a series of protests against the government and the European Union. Demonstrators stopped train services by walking on the tracks while striking lorry drivers disrupted traffic by driving slowly and blocking roads. Further protests are planned.


Despite having big problems in the banking sector, Slovenia still hopes to escape the Troika. Recently a stress test in the banking sector took place, the results of which should already be published when this newsletter is send out. There are expectations that bad loans could count up to 7.9 billion euros (around 20 per cent of GDP). However the Slovenian central bank, which said that it would already know the results of the stress test, is optimistic that the government can recapitalize the banking system on its own. It is said that a sum of up to 4.7 billion euros could be necessary for this.

Who we are and why we write this newsletter

This is the first newsletter of TroikaWatch. With this newsletter, we want to cover news about the Troika, the situation in the countries affected by it and the opposition and resistance against it. We hope that this can help connecting struggles and be a contribution to strengthen resistance against austerity policies.

We are a group of people that mostly know each other from meetings like the European Social forum, Firenze 10+10, the Altersummit, EU in crisis or Blockupy. Some of us work for progressive NGOs like the Bretton Woods Project, CEO, CADTM or TNI, others are activists in networks like Attac or ICAN.

We plan to publish this newsletter once or twice a month in English, Dutch, French, German, Greek, Italian, Portuguese, Slovenian and Spanish. You can subscribe to this newsletter at www.troikawatch.net/lists and contact us by sending an email to info@troikawatch.net.

Greetings from Amsterdam, Athens, Berlin, Bruxelles, Frankfurt, Kopenhagen, Lisbon, Ljubljana, London, Barcelona and Thessaloniki,
The TroikaWatch Team

This post is also available in: Dutch, French, German, Italian, Spanish, Greek, Portuguese, Slovenian

8 thoughts on “1st newsletter of TroikaWatch

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  6. Hello:

    Yours is a good page because shows issues that aren’t in the normal media. Go ahead in this new year and congratulations!

  7. I am a sister activist from the US. Thank you for such a thought-provoking report on our European counterparts. I think that in no time, if we don’t stop this, the corporations will be allowed to openly rule our nations.

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