Germans urge Greek economy takeover

More Greek woe. Greek PM Lucas Papademos claimed last night Greece was on the brink (again) of being forced out of the euro, given the reluctance of international investors to agree a debt deal.

Meanwhile the Germans appear more intent then ever on grabbing control of the Greek economy - to the absolute fury, unsurprisingly, of the Greek people. What chance a deal now?

EU control

"Sovereignty is a red line that no one would dare cross," Greek culture minister Pavlos Geroulanos is quoted as saying in the Mail. "I would rather resign than allow anybody to tell us the way we should be spending our money."

Currently EU leaders are yet again assembling in Brussels. There is serious doubt about whether Greece is capable of implementing much-needed austerity measures, such as hiking taxes. Yet without another EU hand-out, Greece cannot repay €15 billion of loans due by March.


German economic minister Philipp Rösler now wants external control over the Greek economy. Leadership and monitoring, he claims, must come via the EU. An extraordinary statement: how can any EU country cede control of their budgetary control? Deeply shameful for Greece encouraging more transfer of wealth, inevitably, from a sovereign state to private creditors.

It's likely that the chance of a deal will drag on yet. European deadlines have a habit of coming - and going. Or manoeuvring Greece now into a position, very possibly, of orderly default. But that brings huge risk with it, depleting the bail-out pot further for other Southern Med borrowers.

The current situation is hugely undemocratic for Greeks. So far UK politicians have reacted ambivalently to the German move, though Iain Duncan Smith appears an exception, stating that effective German control over the Greek economy is a threat to democracy.
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