Germany will allow Greece the extra time it wants to pay off its debt, in exchange for more control over Greece spending, according to a paper leaked to the Financial Times.
Greece’s creditors are agreeing to give the nation an extra two years to pay off its debts, according to several media reports. The extension will cost €16 to €18 billion. But the German proposal would subjugate Greece to tough conditions in return.
The proposal also demands that if Greece deviates from the bailout plan, the government must implement automatic spending cuts. This part of what the Financial Times calls the “much tighter controls over Greece’s own tax and spending policies.”
Also, under Germany’s plan, the bailout money would go straight into a trust account managed by an international body such as the European Central Bank. This essentially strips Greece of budgetary control over its own funding, according to the FT.
Once Greece’s government is making money again (before interest payments), Germany wants some of that money to go into that trust account.
Greece resents this interference in its sovereignty. “We are not a protectorate,” said former Greece finance minister and head of the pasok party Evangelos Venizelos, as he rejected other demands from Greece’s creditors. These included demands for Greece to enforce a six-day week, essentially enforcing Sunday worship on the population.
Full article: Germany Demands More Control Over Greece (The Trumpet)