German Document To Take Away Financial Sovereignty From Greece Exposed!

A German government document leaked to the Financial Times late on
Friday, and seen by Kathimerini English Edition on Saturday, proposed a
commissioner to have veto powers over Greece’s budget decisions if it
failed to meet demands set by foreign creditors. Specifically it says that “Budget consolidation has to be put under a strict steering and control system. Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time. A budget commissioner has to be appointed by the Eurogroup with the task of ensuring budgetary control. He must have the power a) to implement a centralized reporting and surveillance system covering all major blocks of expenditure in the Greek budget, b) to veto decisions not in line with the budgetary targets set by the Troika and c) will be tasked to ensure compliance with the above mentioned rule to prioritize debt service. ”

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According to the newspaper, a commissioner can be appointed by eurozone finance ministers and would have the power to veto decisions on the budgets adopted by the Greek government in an “unprecedented” act of EU control over a State. It also notes that the Financial Commissioner would have the power of veto over decisions by the Greek government, unless they are consistent with the objectives set by international creditors.

In Germany several officials on Monday reacted negatively to the leaked proposal.

“Berlin should be more cautious with what it suggests,” Markus Ferber, a Christian Democrat (CSU) lawmaker in the European Parliament told Die Welt daily in an interview on Monday. “You must not demand from others something that you would not be willing to accept for yourself,” he added.

In the interview, Ferber said Germany’s Constitutional Court has already ruled that the European Union’s Lisbon treaty does not restrict the German parliament’s control over the budget, which he described as a “fundamental element of national sovereignty.”

In Athens, the government reacted strongly over the weekend to the leaked German document. “Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time,” the paper said. Under the plan, Athens would also legally commit itself to paying its EU-IMF loans before spending cash on public expenditure.

Despite the backlash in Athens, the German plan received open backing from a high-ranking official in Berlin.

“We need more leadership and monitoring in implementing the course of reform (in Greece),” German Economy Minister, and vice chancellor, Philipp Roesler said in an interview with Bild newspaper published on Monday.

Jorgo Chatzimarkakis, an MEP for Germany’s Liberal Democrats (FDP), on Monday said that appointing a commissioner to make sure Greece pays its debts instead of making investments to spur economic growth makes no political or economic sense.

Criticism also came from Sigmar Gabriel, chairman of Germany’s Social Democratic Party (SPD), who said that introducing austerity measures alone will not be enough to rescue the eurozone’s troubled economies.

“Anyone who thinks we can win back the economies of southern Europe exclusively through austerity measures is deluding himself.”

EU chiefs gather for their first summit of 2012 Monday as they continue their efforts to control the euro area’s debt crisis. Greek Prime Minister Lucas Papademos has yet to finalize a debt deal that could see creditors lose more than 50 percent of the net-present value of the country’s debt.

On Sunday, Finance Minister Evangelos Venizelos Sunday the idea, saying it would be inappropriate to ask Greeks to compromise their country’s dignity for more bailout funds. “Whoever puts before a people the dilemma of choosing between financial assistance and national dignity disregards basic historical lessons,” he said. His comments came a day after Education Minister Anna Diamantopoulou slammed the plan as “the product of a sick imagination.”

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