BERLIN (Reuters) - Germany tried on Monday to tone down reports, sparking indignation in Greece, that it wants a new euro zone “budget commissioner” with the power to veto budget decisions taken by the Greek government.
A German finance ministry spokesman said on Monday the euro zone was discussing several ways to closely guide the implementation of budget savings programs in countries that have taken up rescue funds, but had not settled on one proposal.
“There are discussions in the euro zone about what we should do when in certain cases, certain programs go off track over a long period, and time and again,” spokesman Martin Kotthaus told a regular news conference, adding there were still shortcomings in the implementation of Greece’s savings program.
“In the eurogroup there is a discussion, and there are different proposals and papers,” he said.
Greece, which has repeatedly failed to meet the fiscal targets set out by its international lenders, is in talks to finalize a second 130 billion-euro package.
Reuters reported on Friday that Germany wanted Greece to give up control of budget policy to European institutions as part of discussions over the package. The Financial Times wrote it had obtained a copy of the proposal showing Germany wanted a new euro zone budget commissioner.
With many Greeks blaming Germans for the austerity medicine their country has had to swallow, officials in Athens dismissed the idea of relinquishing budget control as out of the question.
Both German Chancellor Angela Merkel and Foreign Minister Guido Westerwelle criticized the fierce tone of the debate, in a sign the German finance ministry may be sampling reaction to an idea it has concocted but not yet cleared with the cabinet.
“Everything only works if Greece and other states are in talks with one another,” Merkel said on the sidelines of an informal European Union summit in Brussels, noting that she did not want any controversial debate. “I believe we are carrying out a discussion we should not be.”
Westerwelle struck a more forceful tone, saying he was “very angry about the tone of this debate.”
“We want to lead a debate that encourages and that does not discourage,” he said on the sidelines of a visit to Cairo.
The spokesman said Greece’s debt sustainability could only be assessed after the conclusion of discussions on private sector involvement in a haircut on its sovereign debt.
Reporting By Sarah Marsh. Editing by Jeremy Gaunt.