Germany wants dictatorship in Greece

Police violence in Greece against anti-austerity protests, cartoon by Steve Bel

From daily The Morning Star in Britain:

Greece told to give up tax powers

Sunday 29 January 2012

by Our Foreign Desk

Germany has demanded Greece hand over control of tax and spending to an unelected eurozone official before the indebted country can be given any more EU loans, an official in Berlin revealed on Saturday.

The request is being discussed by eurozone finance ministers because former banker Lucas Papademos‘s unelected government hasn’t followed through on the cuts it promised to get a €110 billion (£92bn) loan from the International Monetary Fund, European Union and European Central Bank.

The plan is to give a eurozone commissioner a veto against any budget item as well as other powers to make sure Greece is taking harsh enough steps to repay its debt.

The German official spoke on condition of anonymity because the talks are confidential.

Greece’s creditors already have unprecedented power of the country’s spending under the original “bailout” deal.

And talks are under way for a further €130bn (£110bn) “rescue package.”

German news magazine Der Spiegel on Saturday cited an unnamed official as saying Greece might actually need €145bn because of its prolonged recession.

The German proposal, first reported by the Financial Times, is likely to boost support in Greece for a general strike called by the All Workers Militant Front for next month.

A powerful budget commissioner would further reduce the political leeway of Greece‘s government, just as politicians are gearing up for an election planned for this spring.

The Papademos government is currently locked in a twin effort, seeking to secure a crucial debt relief deal with private investors while also tackling the pressing demands from its big creditors for more austerity measures and deeper “structural adjustment.”

Despite two weeks of intensive talks, a €100bn (£85bn) debt relief agreement with private investors has yet to be reached.

Greek Prime Minister Lucas Papademos and Finance Minister Evangelos Venizelos met international bankers and private institutions on Saturday.

Officials in Athens insist that they are close to a deal.

Greece would almost certainly withdraw from the eurozone if it defaulted on its debt, further destabilising the currency bloc.