Greece 'will not cede budget control to EU'

Page last updated at 09:53 GMT, Saturday, January 28, 2012 - 14:53 EST

AFP:

Greek PM Lucas Papademos (left) speaks with German Chancellor Angela Merkel before last month's EU summit in Brussels

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Greece will not cede control over its budget to the European Union as has been proposed by Germany as a condition for a second bailout, Greek government sources told AFP on Saturday.

"There is effectively a 'non-paper' that was presented to the Eurogroup," one of the sources said, referring to reports that Germany had submitted a proposal to have the eurozone assume control over the Greek budget before it receives a new bailout.

"Greece will not discuss such a possibility," said the source. "It is out of the question that we would accept it, these are matters of national sovereignty."

Such a move would "require a change in (EU) treaties."

The Financial Times reported on Saturday that under Germany's plan a commissioner appointed by the other eurozone finance ministers would be able to veto budget decisions made by the Greek government.

The report came as Greek officials were in talks with private creditors on a major debt writedown to avoid a looming default, and ahead of a meeting of EU leaders in Brussels on Monday focused on a new fiscal pact.

Read the whole story: AFP