Greece has struggled to meet the fiscal targets set out by its international lenders [Reuters]
Germany wants Greece to relinquish control over its budget policy to European institutions as part of discussions over a second rescue package, Al Jazeera has learnt.
The proposal would give European Union institutions operating in Greece power over the country’s fiscal policy.
Earlier, UK’s Financial Times newpspaer said it had obtained a copy of the proposal showing Germany wanted a new euro zone “budget commissioner” to have the power to veto budget decisions taken by the Greek government if they were 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, Greece would only be allowed to carry out normal state spending after servicing its debt, the Financial Times 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
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