Germany wants government to give up budget control and limit its role to the executor of the troika decisions.
Athens.- Germany is pushing for Greece to relinquish control over its budget policy to European institutions as part of discussions over a second rescue package, a European source told Reuters on Friday.
“There are internal discussions within the Euro group and proposals, one of which comes from Germany, on how to constructively treat country aid programs that are continuously off track, whether this can simply be ignored or whether we say that’s enough,” the source said.
The source added that under the proposals European institutions already operating in Greece should be given “certain decision-making powers” over fiscal policy.
“This could be carried out even more stringently through external expertise,” the source said.
The Financial Times said it had obtained a copy of the proposal showing Germany wants a new euro zone “budget commissioner” to have the power to veto budget decisions taken by the Greek government if they are not in line with targets set by international lenders.
“Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time,” the document said.
Under the German plan, Athens would only be allowed to carry out normal state spending after servicing its debt, the FT said.
“If a future (bail-out) tranche is not disbursed, Greece cannot threaten its lenders with a default, but will instead have to accept further cuts in primary expenditures as the only possible consequence of any non-disbursement,” the FT quoted the document as saying.
The German demands for greater control over Greek budget policy come amid intense talks to finalize a second 130 billion-euro rescue package for Greece, which has repeatedly failed to meet the fiscal targets set out for it by its international lenders.
A European Commission representative, called on to comment on press reports referring to a document distributed at the Eurogroup, proposing that a senior eurozone official assumes control of the implementation of Greece’s budget, told AMNA on Saturday that “the executorial task must remain in the full jurisdiction of the Greek government, that is accountable to the country’s citizens and bodies. This responsibility lies on the shoulders of the Greek government and must remain so”.
Senior government sources, referring to a report in the “Financial Times” on a proposal by Germany for a commissioner to be appointed who will check and approve Greece’s fiscal issues, stressed that “there is no question of such a thing being accepted. A similar proposal had been made in the past by a Dutch minister as well. We will not even discuss it.”
A Greek finance ministry official, speaking to Reuters, said on condition of anonymity that “No country has put forward such a proposal at the Eurogroup,”, adding that the government would not formally comment on reports based on unnamed sources.
The German demands are likely to prompt a strong reaction in Athens ahead of elections expected to take place in April.
“One of the ideas being discussed is to set up a clearly defined priorities on reducing deficits through legally binding guidelines,” the European source said.
He added that in Greece the problem is that a lot of the budget-making process is done in a decentralized manner.
“Clearly defined, legally binding guidelines on that could lead to more coherence and make it easier to take decisions – and that would contribute to give a whole new dynamic to efforts to implement the program,” the source said.
“It is clear that talks on how to help Greece get back on the right track are continuing,” the source said. “We’re all striving to achieve a lasting stabilization of Greece,” he said. “That’s the focus of what all of us in Europe are working on right now.”
PM Lucas Papademos was expected to hold a meeting with political party leaders supporting the government yesterday. Amongst the hot issues is the EU partners’ pressure.
PASOK categorically rejects scenarios concerning “Greece’s supervision” published in a section of the international press. The party’s spokesman Panos Beglitis stressed in a written statement that “if the reports are valid, whatever idea of ‘commissioners’ in Greece must be repelled.”
Beglitis also revealed that certain partners had attempted to impose similar scenarios during discussions on the decision taken on October 26, that were rejected by the then prime minister George Papandreou and the government of PASOK.
He added that “the cooperation with our EU partners is based on the decisions of October 26-27 and on the commitments that our country has assumed, following the clear rejection of the efforts for ‘commissioners’ and ‘guardianship’ to which prime minister G.A. Papandreou and the government of PASOK had reacted at the time.”
The Communist Party of Greece (KKE), in an announcement on Saturday, stresses that “their game is fixed. The Federation of Greek Enterprises and the parties of the government, covering themselves behind the troika, are handling the new savage crime against the working people and GSEE (the General Confederation of Workers of Greece) is covering up for them,” and calls on working people not to accept to be condemned “to salaries of 400-500 euros, to unemployment, without social security, without Health.”
KKE adds that it is up to the working people “to upset their plans and to punish the accomplices severely. Class organisation, popular alliance. Counterattack everywhere. Down with the parties of plutocracy. Out with their troika associates, disengagement from the EU with popular power that will write off the debt” the announcement concludes.
Radical Left Coalition (SYRIZA) Parliamentary Group president Alexis Tsipras, in a statement on Saturday, called for the government’s resignation and the holding of elections in February.
Tsipras stressed that the troika’s demands for the completion of the PSI agreement, that one way or another will not make the debt viable, exceed every limit of logic since, as he says, it is not a question of new measures but a plan for the looting of the country and the cession of its sovereignty to the European banking system and to international usury.
He further said that “the three political party leaders and the prime minister of a limited period of office, who chose two months ago to sidestep the popular outcry, have no legalisation to sign in the name of all the Greeks the country’s condemnation. The only national responsibility option left for them is, indeed today, to decide the government’s resignation and the recourse to the popular decision, in February.”
Popular Orthodox Rally (LAOS) party leader George Karatzaferis appeared determined to clear up matters in political party leaders’ meeting, according to associates of his, who, speaking to AMNA, even left open the possibility of him leaving the government in the event that some of the issues he has raised are not implemented.