Wednesday

29th Jun 2022

EU leaders differ on special budget tsar for Greece

EU leaders arriving in Brussels for a summit Monday (30 January) 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.

Berlin's proposal to see have a Greece-designated commissioner with a "veto right against budget decisions not in line with the set budgetary targets" dominated journalists' questions ahead of the summit, supposed to be focussing on growth and putting the finishing touches on a fiscal discipline treaty.

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Swedish Prime Minister Fredrik Reinfeldt was among the most supportive of the idea. He said he understood Germany's "frustration" noting that Greeks are "do not deliver on the reforms that they have promised others."

"The experience is you need help from outside when you need to make tough reforms."

His Finnish counterpart Jyrki Katainen was more nuanced saying: "It is very natural that countries who help Greece need more information about what is happening in Greece. We just have to find a suitable compromise for Greece that is suitable for our principles and satisfies our need for additional information."

Others were more sceptical.

Luxembourg prime minister Jean Claude Juncker objected to having a commissioner specifically tasked with keeping debt-ridden Greece in line.

"I don't think this German proposal should be dedicated to Greece. I am strongly against imposing a commissioner with that mission only to Greece."

Austria, normally in the camp that takes a hard line on fiscal sinners, shared the same concerns as Luxembourg,

"Greece has to stick to its commitments but we do not think it's a good idea to send a special commissioner just for Greece. It would be better if the European Commission continued its monitoring it does for all [bail-out] programme countries," said Chancellor Werner Faymann.

Berlin's controversial idea, revealed by the Financial Times over the week, has sparked fury in Greece which has already undergone a series of tough austerity measures in return for EU-IMF money.

For her part, Chancellor Merkel, who is under pressure from backbenchers and her liberal coalition partners to be as tough as possible on Greece, struck a less combative tone than the original leaked proposals. However she did not back down from the idea.

"I think we have to have a discussion on how to help Greece, not a controversy, but something that is successful for the people of Greece."

Treaty

The German leader was confident that last minute difficulties on the Berlin-pushed fiscal discipline treaty would also be solved, although the small document - currently in its fifth draft - has drawn increasing criticism for being too focussed on balanced budgets while offering nothing on growth.

"The last questions we will also get clarified," said Merkel.

The latest draft softens wording on the balanced budget and altered an article so that fine money from misbehaving euro countries will continue to go to the eurozone bailout fund, but fines from non-euro countries will go to the general EU budget.

However, there is still continued controversy over when non-euro countries should be invited to euro summits. Poland, Hungary, Slovakia and the Czech Republic are seeking more inclusive language than to date.

Meanwhile the main topic of the summit is supposed to be growth and tackling unemployment. But leaders have had little concrete to offer on this front.

Going into the summit, Merkel said member states would compare laws on employment to find out who is having the most success.

A European Commission plan to redirect €82bn of EU funds towards growth and jobs policies has been criticised by experts as being too little and too vague.

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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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The European Parliament approved last week a non-binding resolution on illegal logging, calling to extend the EU public prosecutor's mandate to also cover environmental crime. The lead MEP on the file has called for urgent implementation.

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