IPP publishes today the first number of its Working Paper series: EU commission participation in the Troika mission, by António Goucha Soares, Jean Monnet professor of European Law at ISEG/University of Lisbon.

Working papers tend to be more academic in nature, and ultimately serve as a basis for discussion regarding ongoing research projects – with important implications for public policy – which are hosted or supported by IPP, and which may eventually result in articles published in scientific journals.

Download the Working Paper here (PDF) or read on for a brief summary.

This paper starts by describing the traditional role of the European Comission (EC), then proceeds to analyse how this role has been subverted by recent treaties and the economic crisis. It will then discuss the EC’s role in the financial assistance of European countries during the crisis, as well as its consequent accountability.

The predecessor of the EC is the Coal and Steel Community’s Higher Authority. This institution was designed to be an independent authority that acted in the general interest of the community and did not directly represent the interests of any member states. The 1954 Rome Treaties passed on this role to what is now known as the EC.

The EC’s legitimacy traditionally rested on its technical expertise, designed to above all else serve the Union’s best interests instead of the political whims of larger countries. Thus, it was an ally of smaller states and ultimately rebalanced the power within the EU, therefore preventing the damaging political struggles of the past.

However, recent treaties and economic circumstances have conspired to shift this role. Firstly, the EU parliament has gained power at the EC’s expense. Secondly, the EC’s current composition no longer favours its independence. This is because the EC is now proportionately comprised of member state representatives, so that it is no longer a truly supranational entity. An illustration of this is recent perversion of the EC’s power to initiate legislation – increasingly, the EC is used to hasten policies in the interest of specific member states.

As noted, the economic crisis has also contributed to the EC’s loss of independence. This is largely due to its involvement in financial assistance programs. According to the Maastricht Treaty, the ECB was not allowed to bail out struggling member states. To circumvent this, a working group comprised of the IMF, ECB, and EC was assigned the role of financial assistance and supervision. Initially, the EC was involved in the so-called Troika because of its technical expertise.

However, it did not deliver on this promise and ultimately perverted its traditional role as an independent technocratic EU institution. The fact that the EC was closely involved in Troika negotiations and supervision is a case-in-point to this loss of independence. Given that they could withhold loans, the Troika, and therefore, the EC, yielded immense power over struggling nations. In fact, European politicians publicly stated that the Troika had rendered their countries glorified protectorates. As a consequence of its involvement in the Troika, the EC acted on the behalf of certain member states and discarded its responsibility to weaker countries.

To what extent can and should the EC be held responsible for the Troika’s decisions? It is essential to first understand the EC’s failings within the working group. Accounts suggest that as a fiscal supervisor, the EC was even less flexible than IMF financial adjustment hardliners. Furthermore, this financial adjustment was never accompanied by a due commitment to understanding and mitigating the macroeconomic imbalances that were at the root of the European economic crisis.

The EC’s failure to act as a technocratic institution was compounded by its uncritical acceptance of certain pieces of economic research. More specifically, the EC did not challenge the “expansionary austerity” theory that underpinned the Troika’s financial adjustment strategy.

As a consequence, countries like Portugal deepened their recession and saw their public debt and unemployment increase dramatically.

Although Troika leaders have publicly stated that only the countries that enacted the policies are responsible for their outcomes, it is clear that the group’s power played an instrumental role. So can they ultimately be held accountable for their decisions? Because it falls within the jurisdiction of international law, it is unlikely that the IMF can be held accountable. Conversely, as a European institution, under EU law, the EC can be held responsible. Nonetheless, this is made difficult by the fact the Troika was set up outside EU treaties. In practice it is also difficult to pin point the exact extent to which the EC was responsible for the Troika’s decisions.

Download the Working Paper (PDF) and leave your thoughts and comments on this page.

Periodically, we will present a collection of the IPP’s team in the press, as well as the impact of our projects and publications on the public debate. This is the third edition.


At the end of March, Paulo Trigo Pereira questioned the Prime Minister’s assertion that Portugal’s vaults are “full”.

Ana Rita Ferreira wrote about recent demonstrations in Brazil.

Finally, Paulo Trigo Pereira wrote in Publico about the Presidential elections.

«Vivemos assim em ambiente de “panela de pressão” com uma tensão crescente, em particular no Estado, alimentado por uma…

Posted by Institute of Public Policy Thomas Jefferson-Correia da Serra on Monday, April 13, 2015

Periodically, we will present a collection of the IPP’s team in the press, as well as the impact of our projects and publications on the public debate. This is the third edition.


At the beginning of the month, described the fractured nature of the European centre-left. She explained that the heterogeneity in leftist party values has contributed to the dilution of socialism in Europe.

Pedro Pita Barros, was cited by Visão debunking the idea that the ageing of the population is the main reason for rising health costs.

Finally, Paulo Trigo Pereira highlights the implications of a Monetary Union break up on the European Union’s survival.

Periodically, we will publish a collection of some of the IPP’s members’ public interventions, as well as the impact of our projects and publications on the public debate. This is our second edition.


In the last 2/3 weeks, the public debate has been marked by Greek events, and several of our directors have been active participants. More recently, the publishing of data concerning 2015 budgetary execution have been subject to analysis and reflection.

Paulo Trigo Pereira  analysed these data yesterday (Sunday, 1st of March) in an article that serves as a good introduction to the specificities of public expenditure data.

Paulo Trigo Pereira, Pedro Pita Barros and Ricardo Cabral, as well as other IPP initiatives, are amply cited in this article by Francisco Louçã which spurred debate on the 27th of February (Friday).

No mesmo dia, Ricardo Cabral comentava, também no blogue/rubrica “Tudo Menos Economia” do Público, os desafios que enfrenta o governo grego nas difíceis negociações que terão lugar até abril/maio com “as instituições”.

Marina Costa Lobo wrote on the 26th of February (Thursday) in Público about how the “post-Troika” has highlighted, for the first time in the history of Portuguese democracy, a gulf between the two main areas of public policy regarding European issues, and how these issues have increasingly dominated national public debate.

Antes, a 12 de fevereiro, Paulo Trigo Pereira esteve na TVI 24, onde se discutiu o impasse nas negociações entre a Grécia e a Europa.

Every fortnight, we will publish a collection of some of the IPP’s members’ public interventions, as well as the impact of our projects and publications on the public debate. This is our second edition. This is the first edition.


 

Paulo Trigo Pereira, president of IPP, numa longa entrevista a Rui Peres Jorge, do Jornal de Negócios (link para assinantes), on the 25th of November, put forward ideas that will be explored in the IPP/Budget Watch report on the 2015 budget, which considered «a budget that is 50 per cent voter-centric».

The following day, there was Seminário «Budget Watch: OE 2015 – o Orçamento possível», cited, for instance, by Rádio Renascença which highlighted that “according to the [Budget Watch group], without new measures, the deficit will remain at 3.16 per cent of GDP, and not at 2.7 of GDP as predicted by the government».

On Saturday the 29th, the final results of Budget Watch – Índice Orçamental ISEG/IPP, difundidos pelos media partners Público (link para assinantes) e Expresso (edição impressa, 29/11/2014) were published.

In other news, on the 1st of December, IPP director Carlos Farinha Rodrigues explained «how to fight poverty in times of austerity» on Económico TV with Rui Leão Martinho, representative of the Order of Economists, and Maria Joaquina Madeira.

Finally, yesterday on the 4th, Ana Rita Ferreira argued in Público that as a result of the Socialist congress last weekend, «an ideological basis for future political action» in the social realm was establish, despite the lack of a similar basis in the economic realm.

Ricardo Cabral, also director at IPP, was quoted in the Financial Times concerning the relationship and identification of Portuguese citizens with EU institutions, and how this has evolved in recent years.

Barring any statement indicating otherwise, public declarations by directors and other members of the IPP represent the opinions of those individuals rather than that of the IPP.

The Budgetary Support Technical Unit of the Parliament (UTAO) dedicates a section (pp.101-107) of its analysis of the State Budget 2015 (Parecer Técnico n.º 4/2014, disponível online), to matters of budgetary transparency. In this chapter, it presents Portugal’s evolution in this sphere and highlights the main additions predicted for the 2015 budget.

Accordingly, it references two IPP projects: Portuguese participation in the Open Budget Survey (see pp. 101 e 102) and Budget Watch (see p. 103). In both cases it presents the main conclusions of the reports (OBS 2012 e BW 2014) and uses them alongside a recent IMF report to make recommendations for the government.

Next week we will publish the findings of the 2015 Budget Watch. This will be the sixth edition of the initiative, which will feature a critical analysis of the OE2015 proposal with respect to budgetary transparency.

See here the UTAO reference to Budget Watch(click to access the full document):

 

 

 

OE2015

As usual, yesterday (15th of October), the State Budget for 2015 was presented by the government. This should be at the centre of the public debate for the following weeks.

Of note is the goal of reducing the deficit to 2.7 per cent of GDP. This represents a revision to the initial goal of 2.5 per cent as defined in the Document for Budget Strategy for 2014-18 presented by the government last May.As highlighted by Paulo Trigo Pereira yesterday on SIC Notícias, this represents an approximation to what the IPP has defended in its first policy paper Portugal: Budget strategy for 2014-18, where a goal of 2.9 per cent was defended.

Other members of IPP have been contributing to the debate regarding the OE2015, such as Ricardo Cabral no Público ou Pedro Pita Barros in his personalblog. Do not miss: follow us on Facebook and follow the latest opinions of our members.

We believe that OE2015 is a historical moment.The fact that it has a “non excessive” deficit as its first goal, in conjunction with the pre-electoral climate that is already felt, we believe that it is particularly deserving of careful and critical consideration. The IPP will contribute in this respect, and part of our efforts include the new and improved edition of the Budget Watch, an annual initiative in partnership with ISEG, Deloitte, Expresso, and Público. This project aims to scrutinise the State Budget and features the participation of several eminent academics and businessmen.

 

Foto: José Sena Goulão / Lusa

primariasps

Next Sunday’s primary elections, which will elect a Socialist candidate for the Prime Minister position in 2015, represent an important step towards incentivising civic participation and democracy in Portugal. Several IPP directors contributed to the ongoing debate.

The opinions expressed in several articles represent the individual beliefs of IPP directors, rather than IPP as an organisation. IPP neither directly not indirectly endorses any political party or candidate.

Analysts attribute victory to Costa in the television debate:
Marina Costa Lobo, na RTP

The third round:
Ricardo Cabral, no Público

Socialist primaries: leadership and solutions to face the country’s problems?
Paulo Trigo Pereira, no Público

Seguro and Costa: ideological differences
Ana Rita Ferreira, no Público

Ana Rita Ferreira, in Económico TV:

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Portugal terminará em breve o programa de ajustamento e a troika sairá do país, mas com a dívida e o desemprego ainda muito elevados. O Documento de Estratégia Orçamental (DEO) recentemente apresentado pelo Governo é uma peça central na decisão sobre a estratégia para as políticas públicas nos próximos anos que serão, sem dúvida, decisivos, mas também muito difíceis e desafiantes para a economia e sociedade portuguesas. Entre cortes e aumentos que alternativas existem?

Hélder Reis, Secretário de Estado Adjunto e do Orçamento, fará uma primeira abordagem do documento, precedendo o debate com Albert Jaeger, representante do Fundo Monetário Internacional (FMI), Óscar Gaspar, economic advisor of the Socialist Party, Paulo Trigo Pereira, professor of public finance at ISEG and president of IPP TJ-CS, and João Ferreira do Amaral, professor at ISEG and President of the general assembly at IPP TJ-CS. The debate will be moderated by Luís Ferreira Lopes, economics editor for SIC. The closing of the ceremony will be presented by Ricardo Cabral, vice principal of Universidade da Madeira and director of IPP TJ-CS.

The virtues and shortcomings of the adjustment programme, as well as the necessary conditions for both budgetary consolidation and social cohesion, will, of course, be relevant in this debate.

Click here to sign up – enrolment is free but limited to room capacity!

In the 2nd of March 2014 edition of Público newspaper, Paulo Trigo Pereira writes and article entitled “Portugal is not a blank slate” in his column “Active citizenship”.

The President of the Board of IPP  defends that the budget presented by the Government for 2013-2017 entails a practical freezing of public salaries, which may contribute to the weakening of the State, in addition to the “inequity inherent to austerity for two particular groups of people (pensioners and public servants)”.

The article is available in no site do Público, and shortly here on IPP’s website.

In this article, a transcription of Paulo Trigo Pereira’s intervention in Serralves is cited. You can access it here.