Eurozone Chief Wants EU Oversight of Greece

ATHENS – While Greece has passed more austerity measures to give guarantees for a second bailout of $172 billion to keep the country from defaulting, mistrust among leaders of the international lenders hasn’t abated, with Eurozone chief Jean-Claude Juncker saying he favors a European “budget commissioner” to oversee the country’s shaky finances. Juncker, responsible for the 17 countries that use the euro as a currency, said his proposal is different than a budget czar for Greece that Germany proposed, but didn’t say how.
The German notion set off a firestorm of criticism in Greece and reignited tension between the countries with many Greeks fearful that Germany wants complete control of Greek finances. Juncker said he was concerned that not all the Greek promises have been met. “I did not yet receive the required political assurances from the leaders of the Greek coalition parties on the implementation of the program,” he said.
In remarks in the German newspaper Die Welt, Juncker said that the European Union needs its own person in Greece to monitor the country’s reconstruction from its deep economic crisis. That might not sit well with Greeks who said they don’t want to take orders from foreigners, although as part of the second bailout Greece negotiated a write down of $134 billion in debt and ceded control to English law.
“I would be very much in favor of an EU commissioner charged with the task of building up the structure of the Greek economy,” said Juncker, who is also Luxembourg’s prime minister. “Not a ‘budget commissioner’ but a construction commissioner, pooling together all the competences of the EU Commission concerning Greece,” he said, adding that such a figure would work closely with the EU’s top economic official Olli Rehn. The EU should do more to help Greece make better use of infrastructure funds from Brussels and to improve its competitiveness, Juncker said. He said the Greek government so far “hasn’t been able” to bring its economic infrastructure in line with European standards.  “That’s why we have to tackle the implementation ourselves,” he said.
Greece approved bitter new austerity measures this week, slashing the minimum wage and chopping pensions as Athens began implementing measures demanded by international lenders in return for the second rescue package to go along with a first for $152 billion. The attached pay cuts, tax hikes, slashed pensions and planned firing of 150,000 workers has created a deep recession of near 21 percent unemployment and many analysts expect it now get worse. Labor unions staged a three-hour workout on Feb. 29 and a 24-hour strike by transport workers is set for March 1. Greek workers have staged nearly two years of protests, riots and strikes to no avail.
Germany’s lower house of Parliament, the Bundestag, endorsed the Greek bailout despite growing unease by some EU officials about pouring more money into a country that German Finance Minister Wolfgang Schaueble called a “bottomless pit.” Despite the bailout, Standard & Poor’s ratings agency downgraded Greece into a “selective default” for the deal in which most private investors have agreed to take losses of as much as 74 percent, catching Greek and Eurozone officials by surprise, although they expressed optimism it would rise again once reforms begin to take effect. Greece is being ruled for now by a hybrid government of political rivals the PASOK Socialists and New Democracy conservatives under interim Prime Minister Lucas Papademos, a former ECB Vice-President, until elections in April.
(Sources: Reuters, Kathimerini)