http://www.reuters.com/article/2012/01/27/us-eurozone-greece-germany-idUSTRE80Q1ZF20120127
BERLIN |
BERLIN (Reuters) - Germany is pushing for Greece to relinquish control over its budget policy to European institutions as part of discussions over a second rescue package, a European source told Reuters on Friday."There are internal discussions within the Euro group and proposals, one of which comes from Germany, on how to constructively treat country aid programs that are continuously off track, whether this can simply be ignored or whether we say that's enough," the source said.
The source added that under the proposals European institutions already operating in Greece should be given "certain decision-making powers" over fiscal policy.
"This could be carried out even more stringently through external expertise," the source said.
The Financial Times said it had obtained a copy of the proposal showing Germany wants a new euro zone "budget commissioner" to have the power to veto budget decisions taken by the Greek government if they are not in line with targets set by international lenders.
"Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time," the document said.
Under the German plan, Athens would only be allowed to carry out normal state spending after servicing its debt, the FT said.
"If a future (bail-out) tranche is not disbursed, Greece cannot threaten its lenders with a default, but will instead have to accept further cuts in primary expenditures as the only possible consequence of any non-disbursement," the FT quoted the document as saying.
The German demands for greater control over Greek budget policy come amid intense talks to finalize a second 130 billion-euro rescue package for Greece, which has repeatedly failed to meet the fiscal targets set out for it by its international lenders.
CHAOTIC DEFAULT THREAT
Greece needs to strike a deal with creditors in the next couple of days to unlock its next aid package in order to avoid a chaotic default.
"No country has put forward such a proposal at the Eurogroup," a Greek finance ministry official said on condition of anonymity, adding that the government would not formally comment on reports based on unnamed sources.
The German demands are likely to prompt a strong reaction in Athens ahead of elections expected to take place in April.
"One of the ideas being discussed is to set up a clearly defined priorities on reducing deficits through legally binding guidelines," the European source said.
He added that in Greece the problem is that a lot of the budget-making process is done in a decentralized manner.
"Clearly defined, legally binding guidelines on that could lead to more coherence and make it easier to take decisions - and that would contribute to give a whole new dynamic to efforts to implement the program," the source said.
"It is clear that talks on how to help Greece get back on the right track are continuing," the source said. "We're all striving to achieve a lasting stabilization of Greece," he said. "That's the focus of what all of us in Europe are working on right now."
(Reporting By Noah Barking; Additional reporting by George Georgiopoulos in Athens and; Adrian Croft in London; writing by Erik Kirschbaum; editing by Andrew Roche)
http://www.nytimes.com/2011/06/09/technology/personaltech/09basics.html?pagewanted=2&src=tp
I can do this.
I can't hear the compression artifacts.
http://hat4uk.wordpress.com/2012/01/27/athens-talks-update-no-wonder-chaos-comes-from-the-greek/
"I’m getting more firmly settled into the camp that says the Draghi-Merkel axis really don’t want the deal to happen: what they want is a Greek default – albeit fairly ordered – after which the EU survives, and the bankers catch a heavy cold. The problem for Frufru Lagarde is that by strolling down that street, she loses her chemise. My source wasn’t so sure about any of this, but unfortunately he had even more complications to impart.
“It’s a game, no doubt about that. But is it play-games – or is it like, you know, Roman Games to the death? Speaking for my colleagues, I said at the outset that the Greek economic numbers were lousy. As we paid top dollar for the bonds, and made 100% allowance for loss in this year’s results, there’s nothing to keep us here really. But I don’t think we’re in the majority. Also we’ve kind of lost faith in the Greek political situation right now. These guys are already thinking about getting re-elected”.
I have to say, my sense is that Mario Draghi has played a blinder. Whether this is reality or not, there’s a change of mood at the talks now: the bondholders are nowhere near as confident as they were…mainly because they too are in the dark about just how far the ECB/EU will push matters. Or indeed, in private, just how much pressure Washington will apply to get the deal done without a default….at the very least, without a default that triggers expensive CDIs for Wall Street to digest.
In theory, of course, there are just two working days – Monday and Tuesday – left in which to get this deal done and release the next tranche of bailout cash. In practice, the EU has gaily passed umpteen deadlines before, and simply pretended they never existed in the first place. A lot now depends on just how good a poker player Charles Dallara is. But he’s keeping a very low profile indeed."
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