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Greece Will Not Cede Budget Control to EU

Greece will not cede control over its budget to the European Union as has been proposed by Germany as a condition for a second bailout, Greek government sources told AFP on Saturday.
“There is effectively a ‘non-paper’ that was presented to the Eurogroup,” one of the sources said, referring to reports that Germany had submitted a proposal to have the eurozone assume control over the Greek budget before it receives a new bailout.
“Greece will not discuss such a possibility,” said the source. “It is out of the question that we would accept it, these are matters of national sovereignty.”
Such a move would “require a change in (EU) treaties.”
The Financial Times reported on Saturday that under Germany’s plan, a commissioner appointed by the other eurozone finance ministers would be able to veto budget decisions made by the Greek government.
The report came as Greek officials were in talks with private creditors on a major debt writedown to avoid a looming default, and ahead of a meeting of EU leaders in Brussels on Monday focused on a new fiscal pact.
“Budget consolidation has to be put under a strict steering and control system,” the Financial Times quoted the proposal as saying, adding that it had been circulated by Germany on Friday to other eurozone officials.
“Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time.”
In Frankfurt, a European source confirmed the report. “There are discussions and proposals in the heart of the eurozone, including one from Germany” to “reinforce control over programmes and measures already in place,” the source said. “And external expertise on the ground could be run by European institutions and could also have certain decision-making powers,” the source added, requesting anonymity.
“A clear priority has to be given to reducing the budget deficit,” the source said. “In Greece, there is a particular problem of a very decentralised budget policy. A constraining legal framework could bring more coherence and ease, and accelerate the decision-making.”
(source: AFP)

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