Greece must give up control of its budget if it cannot meet the requirements set by the Eurozone. On first blush, that makes sense. Greece cannot control what it is spending so the"adults" must come in and make the necessary changes. This might be alright if you are talking about your child, but this is a country, an independent nation having measures imposed upon them. Is this what should be done?
In previous postings we have said that this is tantamount to an invasion and takeover "without firing a shot." Is this what the worlds' powers should be doing? Will this just cause anger and resentment among the Greeks, in this case, and other countries as this "remedy" is imposed on others? We think it is the wrong medicine.
If a country should not be able to pay its bills, what should be the remedy? Sell off assets? Give up its art collection? Surrender its independence? Work out a payment schedule? All these are options. Which ones make sense to you? Let us know.
Whatever options you suggest, remember, the US might be the next one subjected to your "solution", so choose carefully and ask yourself the question: "How would I like the US to be governed by my solution?
Conservative Tom
By Erik Kirschbaum | Reuters – 2 hrs 42 mins ago
The Financial Times reported on Saturday that 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 plan, Athens would only be allowed to carry out normal state spending after servicing its debt, the paper said.
In previous postings we have said that this is tantamount to an invasion and takeover "without firing a shot." Is this what the worlds' powers should be doing? Will this just cause anger and resentment among the Greeks, in this case, and other countries as this "remedy" is imposed on others? We think it is the wrong medicine.
If a country should not be able to pay its bills, what should be the remedy? Sell off assets? Give up its art collection? Surrender its independence? Work out a payment schedule? All these are options. Which ones make sense to you? Let us know.
Whatever options you suggest, remember, the US might be the next one subjected to your "solution", so choose carefully and ask yourself the question: "How would I like the US to be governed by my solution?
Conservative Tom
Greece should give up budget control: Germany
By Erik Kirschbaum | Reuters – 2 hrs 42 mins ago
BERLIN (Reuters) - Greece must surrender control of its budget policy to outside institutions if it cannot implement reforms attached to euro zone rescue measures, the German economy minister was quoted as saying on Sunday.
Philipp Roesler became the first German cabinet member to openly endorse a proposal for Greece to surrender budget control after Reuters quoted a European source on Friday as saying Berlin wants Athens to give up budget control.
"We need more leadership and monitoring when it comes to implementing the reform course," Roesler, also vice chancellor, told Bild newspaper, according to an advance of an interview to be published on Monday.
"If the Greeks aren't able to succeed themselves with this, then there must be stronger leadership and monitoring from abroad, for example through the EU," added Roesler, chairman of the Free Democrats (FDP) who share power with Chancellor Angela Merkel.
Reuters reported on Friday that Germany wants Greece to give up control of budget policy to European institutions as part of discussions over a second rescue package.
Greece, which has repeatedly failed to meet the fiscal targets set out by its international lenders, is in talks to finalise a second 130 billion-euro ($172 billion) package.
With many Greeks blaming Germans for the austerity medicine their country has been forced to swallow, officials in Athens dismissed the idea of relinquishing budget control as out of the question.Finance Minister Evangelos Venizelos said on Sunday Greece was perfectly capable of making good on its promises.
"Anyone who puts a nation before the dilemma of 'economic assistance or national dignity' ignores some key historical lessons," he said in a statement before heading to Brussels for a European Union summit on Monday.The Financial Times reported on Saturday that 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 plan, Athens would only be allowed to carry out normal state spending after servicing its debt, the paper said.
Crushed by 350 billion euros ($462 billion) of debt and running out of cash quickly, Greece is scrambling to appease the "troika" of its official lenders - the European Commission, European Central Bank and International Monetary Fund - and stitch up a deal with private creditors simultaneously.
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. A government source in Berlin said Germany's proposal was aimed not just at Greece but also at other struggling euro zone members that receive aid and are unable to make good on their obligations.
The European Commission, the executive arm of the 27-country bloc, said it wanted the Greek government to maintain autonomy
Greece has already rejected the EU proposal. Now they are negotiating with their bank creditors to see if they will agree to get repaid only half the money they are owed by Greece and change the interest rates on the other half.
ReplyDelete--David
Greece might have rejected the proposal, however, Germany seems intent on making them accountable an if they are not, to take over the Greek budget.
ReplyDeleteDavid, the posting was from today!
The EU can't do anything to make Greece "accountable" unless Greece agrees to the EU proposal, which they have already rejected.
ReplyDeleteOf course, if the creditors refuse Greece's proposal to forgive half the loan balance and negotiate the interest rate on the other half, then Greece may have to choose between the EU deal or default.
We did the $700 billion TARP bailout of the Wall Street banks in a "no strings attached" deal, and you see what it got us. Maybe the EU learned something from that about making debtors accountable when you loan them money.
--David