Frustrated with the slow pace of implementation of budget overhauls in Greece, Germany is leading a push to force Athens to cede some control over its budget decisions to Europe, a move met by skepticism by European Union officials. A European official familiar with the matter said on Saturday that the reason for such a move—made as a condition of disbursing another round of bailout aid—is "the insufficient progress on Greece's debt reduction, which in part is the result of the country's extremely decentralized budget process." The official said that any decision to place Greece's budget process under increased European control would "have to be taken consensually with Greece" and cited the German proposal as "one idea among many under discussion." The Financial Times previously had reported the effort by Germany. A spokesman for the Greek government rejected the German plan, saying it is up to Athens to negotiate its debt-reduction plan and to implement budget overhauls. "The government stresses that this responsibility lies exclusively with the Greek government," said Pantelis Kapsis, the Greek government spokesman. Meanwhile, negotiations between the Greek government and its private-sector creditors are close to being finalized and a deal should be concluded next week, according to the group leading negotiations for private-sector creditors. A deal could pave the way for a second bailout package for Greece. European Union officials suggested that wresting control of the budget from the Greek government would be a step too far in Europe's efforts to stem the euro zone's sovereign-debt crisis. Officials said the European Commission already was in the process of bolstering its presence in Greece to step up its ability to monitor the country's implementation of overhauls. The officials suggested that the EU's role should be limited to monitoring the situation rather than supplanting the Greek government. "The commission is committed to further reinforce its monitoring capacity and is currently developing its capacity on the ground," said Amadeu Altafaj Tardio, spokesman for EU economics and monetary affairs, adding that "executive tasks must remain the full responsibility of the Greek government, which is accountable before its citizens and its institutions. That responsibility lies on their shoulders and it must remain so." A second European official said the proposal is just one of several ideas under discussion by euro-zone finance ministers. Another idea is to require Greece to introduce a binding legal clause in its budget law "that would make deficit reduction an absolute priority in the system," the official said. The discussions highlight both the urgency and the level of frustration among European finance ministers with the stalled overhaul process in Greece. "Several ideas are being discussed in the euro group right now on how to react to a program that is consistently off track apart from saying the situation is impossible with the possible consequences that would ensue," the official said. A document containing the German proposal was distributed Friday among euro-zone finance ministers. European leaders are scheduled to meet in Brussels on Monday. Although Greece isn't officially on the agenda, it is widely expected that Greece will dominate discussions. In Germany, anger is rising over European demands for more money for Greece. Olli Rehn, European commissioner for economic affairs, called for an increase in international aid for Greece this week, a proposal that has met stiff opposition in Germany. "There will be no money if reform comes to a stop," Horst Seehofer, head of the Bavarian Christian Social Union, a key ally of Chancellor Angela Merkel, told Der Spiegel magazine in a report to appear on Monday. A copy of the report was released on Saturday.
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