Germany wants EU control of Greek budget

Posted January 29, 2012 13:44:20

Photo: Greek prime minister Lucas Papademos (AFP: Aris Messinis )

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Map: Greece

Greece has rejected a German proposal to appoint a European Union commissioner with the power to veto Greek budgets.

German officials suggested the commissioner, appointed by the other eurozone finance ministers, would ensure Greek government revenue was spent on paying off the country's huge debts.

But Greek officials have reacted angrily to the proposal, with a government spokesman saying only Greece should have control over tax and spending.

The country's education minister and former EU commissioner, Anna Diamantopoulou, rejected the notion as "the product of a sick imagination".

Greece is failing to meet targets set by international creditors in return for bailout money.

The proposal emerged ahead of a meeting of EU leaders in Brussels on Monday and focused on a new fiscal pact.

But the European Commission said there was no question of Athens surrendering budgetary control.

"The Commission is committed to further reinforcing its monitoring capacity and is currently developing its capacity on the ground," said economic affairs spokesman Amadeu Altafaj.

However, such key decisions "must remain the full responsibility of the Greek government," he said, which was "accountable before its citizens and its institutions."

"That responsibility lies on their shoulders and it must remain so."

 

Debt talks

And senior Greek politicians and private creditors say they are close to reaching an agreement on writing down Greek debt to avert a looming default.

The country is trying to wrap up a deal with private creditors in which they would accept a 50 per cent cut on the 200 billion euros of debt they hold.

Talks have so far stalled on the amount of interest to be paid on the remaining debt.

Prime minister Lucas Papademos and finance minister Evangelos Venizelos led 90-minute talks on Saturday with Institute of International Finance (IIF) chief Charles Dallara ahead of the European summit on Monday.

Mr Venizelos told reporters he was hopeful of a deal within days.

Germany wants EU control of Greek budget - ABC News (Australian Broadcasting Corporation)