Without the creation of the euro rescue fund Portugal would have been out of the euro. This assertion was made today by Klaus Regling, the director of the European Stability Mechanism, the body responsible for the payment of the European part of the loan received by Portugal under the bailout negotiated with the Troika.
"If the European Financial Stability Facility had not been established three years ago, I think that Ireland, Portugal and Greece would no longer be in the eurozone and Europe would be a different place today," said Regling, appearing before a committee of the European Parliament which is investigating the role of the Troika and its affects on recipient countries.
Regling made a staunch defence of the 'eurozone approach' to the sovereign debt crisis. He appreciated the suffering and difficulties experienced in the rescued countries and their "anger and frustration" but was not bothered by it.
The alternative to the bailout and austerity policies in the countries under the programme could never have been painless, quite the contrary. "What was the alternative? The disorderly failure, the economic collapse and an exit from the monetary union."
Regling defended the actions of the Troika including its democratic legitimacy, one of the aspects most criticized by MEPs. He said that all decisions had been "adopted unanimously by the democratically elected governments of the eurozone countries."
He gave the example of Portugal, where "even the opposition parties which are now in government were involved in the discussion of the bailout programme."
Regling argued that Troika "did not impose measures" on countries, “it is their governments that decide to apply them.” He backed up this assertion by saying that in Portugal where the Constitutional Court rejected certain measures, the government was able to come up with others to achieve the same financial result, without the Troika ever objecting."
