Monday

15th Aug 2022

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.

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“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.

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.

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.

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.

Juncker wants 'reconstruction commissioner' for Greece

The EU should appoint a special commissioner dedicated solely to the reconstruction of Greece, eurozone chief Jean-Claude Juncker has said - an idea welcomed neither by the EU commission nor the Greek Prime Minister.

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Brazilian president Jair Bolsonaro is pitching his Latin American country as the answer to the world food crisis following the war in Ukraine. The traditional wheat importer has now exported three million tonnes of the grain so far in 2022.

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