Greece rebuffs Germany’s proposal of external budget monitoring

Germany’s proposal to create a “budget commissioner” to oversee tax and spending decisions evoked a strong reaction from Greek finance minister, Evangelos Venizelos. The minister dismissed the plan saying that it is not only improper but an insult to Greek pride.

The proposal was made in exchange for €130 billion help as second emergency package to Greece. The country is in dire need of this fund to repay its debts due on March 20. But if the proposed agreement is reached that would give direct control to European Institutions (IMF, ECB and EU). They would then have the right to oversee or intervene (through the budget commissioner), on major budgetary policy decisions in Greece for a certain period.

The problem erupted in the wake of fear that the €130-billion proposed package may not be enough to address the debt crisis. A latest analysis also revealed that the second bail-out package would require additional funds to bring down Greece’s debt to a manageable total by the year 2020.

With taxpayers in Europe already reeling under debt crisis, the need for additional funds is seen as the biggest hindrance to broker a deal between Greece and its private creditors. But the immediate biggest concern is if an agreement is not reached before March 20th deadline, Greece could be the first defaulter among developed nations in a very long time.