Reuters reports that Germany is pushing Greece to give up control over budgetary policy as part of the newest terms of its second bailout.The wire service cites a source a European source with information about discussions and proposals that are going on between eurozone finance ministers, known collectively as the Eurogroup. They met this past week ahead of a summit of EU leaders on January 31.
The source said that EU institutions already operating in Greece should be given “certain decision-making powers” in handling the country’s finances, adding that reforms “could be carried out even more stringently through external expertise.”
Greece has balked at the unending austerity measures that Europe has imposed in exchange for the bailout, yet with a sharply contracting economy it remains no closer to debt sustainability.
That pressure is compounded by repeatedly stalled negotiations between government officials and the country’s private creditors on the scale of losses the latter should take during the Greek debt restructuring. Without a deal, Greece will be forced into a disorderly default on or around March 20 because it will have no money to pay off debts which mature that day.