Monday

13th Jul 2020

Greece vexed by German demand for 'budget commissioner'

  • Papademos (r): 'If this process isn't successfully concluded then we face the spectre of bankruptcy' (Photo: consilium.europa.eu)

Greek politicians have reacted angrily at a leaked German proposal for a euro-commissioner to control the country's fiscal policy.

"Our partners do know that European integration is based on the institutional parity of member states and the respect of their national identity and dignity,” finance minister Evangelos Venizelos said Sunday (29 January) in a statement.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

“Whoever puts before a people the dilemma of choosing between financial assistance and national dignity disregards basic historical lessons," he warned, a veiled reference to the Nazi occupation of Greece during World War II.

A German draft proposal, published on Friday by the Financial Times, envisaged the appointment of a "budget commissioner" by the eurozone finance ministers. This person's job would be "ensuring budgetary control" and compliance with the EU-IMF conditions attached to the second bail-out, which still has to be approved.

Education Minister Anna Diamantopoulou said the plan was “the product of a sick imagination” and her cabinet colleague in charge of culture, Pavlos Yeroulanos, told the BBC it would be "impossible" for Greece to cede control of its tax and spending powers.

But high-ranking German politicians have publicly endorsed the plan.

“We need more leadership and monitoring in implementing the course of reform. If the Greeks fail to do this themselves, the leadership and monitoring must come in a stronger way from outside, for example through the EU,” German economy minister and vice-chancellor Philipp Roesler said in an interview with Bild newspaper published on Monday.

The head of the Christian-Democratic Union in the German parliament, Volker Kauder, echoed similar demands in an interview with Spiegel Online last Thursday.

"We must increase the pressure on Greece. We have to see what comes out of their negotiations with private lenders. One thing must be clear: There will be no more money unless the country is ruled strictly, perhaps even by a state commissioner appointed by the EU or euro-countries. It would be hard, of course, but Greeks themselves may become fans of this in the end," he said.

Kauder argued that if Greek citizens would be asked to choose in a referendum between a "temporary state commissioner" or an "exit from the eurozone," they would vote in favour of the commissioner. "Their confidence in the Greek political class seems to be exhausted," he said.

Finance ministers and the EU commissioner in charge of economics, Olli Rehn, last week gave a scathing assessment of Greece's performance, saying the country is "off track" and urged for a speedy deal with private lenders on a 50 percent cut in their revenues on Greek loans - a precondition for a second bail-out of €130bn Athens hopes to receive to avoid a 'disorderly' default.

Charles Dallara and Jean Lemierre, representing the creditors, said on Saturday talks were "close to the finalisation" and hoped the deal could be signed off this week.

Political support for the reforms is another sensitive question, as the country faces elections in April and the New Democracy leader, Antonis Samaras, has only reluctantly signed a written commitment to the EU-IMF reforms in case his party comes to power. On Sunday, Greek Prime Minister Lucas Papademos gave reassurances that all the political leaders back him in the talks with both creditors and with the EU and IMF for a subsequent bail-out.

“If this process isn’t successfully concluded then we face the spectre of bankruptcy with all the dire consequences for society that entails,” Papademos warned in a statement before heading to the EU leaders' meeting in Brussels on Monday.

EU leaders trying to shift focus from deficits to jobs

Besides a treaty on fiscal discipline, European leaders meeting in Brussels on Monday will also seek to adopt non-binding measures on employment. Their summit will come in the midst of a general strike expected to paralyse the EU capital.

Merkel urges Greece to implement debt deal

Chancellor Merkel has warned Greece it will not get any more EU money unless it finalises details of its second bail-out, such as how much private debt should be written off.

EU leaders differ on special budget tsar for Greece

EU leaders have given a mixed response to Germany's radical idea to have an EU commissioner take over Greece's fiscal policy, with Chancellor Merkel saying she hoped to avoid a "controversial" discussion in favour of a "successful" one.

Feature

National stereotyping - the eurozone's other story

The eurozone crisis has been dragging on for two long years, with events in Greece taking centre stage. Behind the foremost narrative is a second one: the rise of national stereotypes where northerners are virtuous and southerners workshy.

Parliament chief in Greece on rare EU visit

EP chief Schulz will address the Greek parliament on Tuesday evening - the first senior EU politician to visit the debt-stricken country for almost a year.

Merkel downplays budget tsar idea

German leader Angela Merkel on Monday spoke of her "frustration" at the slow pace of reform in Greece but avoided direct talk of imposing fiscal control from Brussels, an idea her French counterpart called undemocratic.

News in Brief

  1. Citizens' perception of judicial independence drops
  2. Irish finance minister voted in as eurogroup president
  3. Italy's League party opens office near old communist HQ
  4. 'Significant divergences' remain in Brexit talks
  5. Germany identifies 32,000 right-wing extremists
  6. WHO to hold probe of global Covid-19 response
  7. China accuses Australia of 'gross interference' on Hong Kong
  8. EU to let Croatia, Bulgaria take first step to join euro

EU forecasts deeper recession, amid recovery funds row

The economies of France, Italy and Spain will contract more then 10-percent this year, according to the latest forecast by the EU executive, as it urges member state governments to strike a deal on the budget and recovery package.

Stakeholders' Highlights

  1. UNESDANext generation Europe should be green and circular
  2. Nordic Council of MinistersNEW REPORT: Eight in ten people are concerned about climate change
  3. UNESDAHow reducing sugar and calories in soft drinks makes the healthier choice the easy choice
  4. Nordic Council of MinistersGreen energy to power Nordic start after Covid-19
  5. European Sustainable Energy WeekThis year’s EU Sustainable Energy Week (EUSEW) will be held digitally!
  6. Nordic Council of MinistersNordic states are fighting to protect gender equality during corona crisis

Latest News

  1. Michel lays out compromise budget plan for summit
  2. Border pre-screening centres part of new EU migration pact
  3. EU 'failed to protect bees and pollinators', report finds
  4. MEPs give green light to road transport sector reform
  5. If EU wants rule of law in China, it must help 'dissident' lawyers
  6. Five ideas to reshape 'Conference on Future of Europe'
  7. EU boosts pledges to relocate minors from Greece
  8. Hydrogen strategy criticised for relying on fossil fuel gas

Join EUobserver

Support quality EU news

Join us