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FT: Germany Calls EU to Control Greek Budget
Posted by keeptalkinggreece in Economy
Germany pushes for the end of the Greek sovereignty and demands to cede budget control into the hands of Greece’s lenders. The German government wants not only to appoint a state commissioner but also to take control of the budget decisions of the debt-ridden country. In a shocking proposal obtained by Financial Times, the German government proposed the appointment of a ‘budget commissioner’ who would implement the Troika decisions and veto any Greek government decisions that will not comply with the Troika’s budget targets. The German proposal was distributed to all EU finance ministers.
”Assurance of Compliance in the 2nd GRC Programme
2.
Transfer of national budgetary sovereignty
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 “
The proposal becomes public a day after German member of the Bundestag, leader of the Christian Democrat Union parliamentary group and close aide to Chancellor Angela Merkel made the proposal, to place Greece under guardianship. A day earlier, Angela Merkel herself had revealed her vision of … United Europe with transfer of national powers to a central government in Brussels:
“My vision is one of political union because Europe needs to forge its own unique path…. We will transfer more powers to the [European] Commission, which will then handle what falls within the European remit like a government of Europe. … The supreme court will be the European court of justice. That could be what Europe’s political union looks like in the future – some time in the future, as I say, and after a goodly number of interim stages.”
PS I propose former DDR-resident Angela Merkel would hire some tutor to teach her the ABC of Democracy.
Full Text of German Proposal
Original Document
The German ultimatum to Greece in its wording
Published: 28.01.12, 02:55 | Up-dated: 28.01.12, 02:57 |
Such a paper has never been known before in the history of the EU: Germany demands from Greece the surrender fiscal sovereignty. The Deutschen Mittelstands Nachrichten presents the paper (in English)
The content of the German ultimatum to Greece:
Assurance of Compliance in the 2nd GRC Programme
I. Background
According to information from the Troika, Greece has most likely missed key programme objectives again in 2011. In particular, the budget deficit has not decreased compared to the previous year. Therefore Greece will have to significantly improve programme compliance in the future to honour its commitments to lenders. Otherwise the Eurozone will not be able to approve guarantees for GRC II.II. Proposal for the improvement of compliance
To improve compliance in the 2nd programme, the new MoU will have to contain two innovative institutional elements on which Greece will have to commit itself. They will become further prior actions for the second programme. Only if and when they are implemented, the new programme can commence:1. Absolute priority to debt service
Greece has to legally commit itself to giving absolute priority to future debt service. This commitment has to be legally enshrined by the Greek Parliament. State revenues are to be used first and foremost for debt service, only any remaining revenue may be used to finance primary expenditure. This will reassure public and private creditors that the Hellenic Republic will honour its comittments after PSI and will positively influence market access. De facto elimination of the possibility of a default would make the threat of a non-disbursement of a GRC II tranche much more credible. If a future tranche is not disbursed, Greece can not 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.2. Transfer of national budgetary sovereignty
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.The new surveillance and institutional approach should be formulated in the MoU as follows: “In the case of non-compliance, confirmed by the ECB, IMF and EU COM, a new budget commissioner appointed by the Eurogroup would help implementing reforms. The commissioner will have broad surveillance competences over public expenditure and a veto right against budget decisions not in line with the set budgetary targets and the rule giving priority to debt service.” Greece has to ensure that the new surveillance mechanism is fully enshrined in national law, preferably through constitutional amendment.
via hat4uk
Popularity: 12% [?]
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WTF???? SHOCKING….
Transfer the money and shut up Germany!!!
LOOOL
[...] categorically rejected the German proposal to cede control over its budget to the European Union as a precognition for the second bailout, the rescue package for Greece. “We can never accept [...]
Ve haf vays of making you pay.
vat?
[...] local perspectives from Keep Talking Greece: Athens categorically rejected the German proposal to cede control over its budget to the European Union as a precognition for the second bailout, the rescue package for Greece. “We can never accept [...]
Like in some of my other posts. This is Germany’s 4th Reicht without firing a single shot. Sorry but in my humble opinion “MOLON LABE” Germany. This is OUR home.
This was always the plan. Fiscal control, tax harmonisation, central planning etc etc. “Le Grand Projet” was always about concentrating all power and control in the hands of the unelected Brussels elite.
They knew before they launched it that the Euro could never work unless the finances of all the participants was harmonised. They knew too that the Southern European countries would fail within the Eurozone.
All this “bailout” business is mere posturing. Their game plan is that Greece will become a satellite of Brussels, as will all the other countries in the Eurozone eventually.
They have no time for democracy. It interferes with their plans. They find it very tiresome when countries like Ireland have referendums, because when the referendum results in an answer they don’t want, they have to make the voters do it again (and again, if necessary) until they get the “right” answer. I’m sure they will soon pass legislation outlawing referendums, because the people are too stupid to know what’s good for them. Better that the technocrats in Brussels make all the important decisions.
If Greece defaults and goes back to the Drachma, she can avoid being subsumed by Brussels. If she stays in the Euro, it will be the end of Greece as a sovereign nation. She will become just a province administered from Brussels. Self-determination will be just a memory.
Eurozone-rs are scared to death of Greece’s EZ exit. Sad that Greece does not cleverly plays this card!
Yes, very true. What Greece needs is someone in power who knows how to play poker. They could gain much advantage from the situation.