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EU seeks tighter scrutiny of Greece

European finance ministers have insisted on much tighter oversight of Greece's spending and austerity efforts, despite assurances that Athens will go ahead with promised cuts and reforms to secure a 130 billion euro (£108 billion) bailout.

Following a three and a half hour conference call between the finance chiefs of the 17 eurozone countries, the ministers welcomed the debt-ridden nation's declaration that it had identified another 325 million euros (£270 million) in cuts on top of the axeing of thousands of public workers and other wage and pension cuts.

They also greeted written commitments from leaders of the two Greek parties that make up the coalition government to implement the promised cuts and reforms even if there is a change in power after elections expected in April.

But in a sign of deep distrust that has built up - especially among rich nations like Germany, the Netherlands and Finland - Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the finance ministers' meetings, said the eurozone needed better ways to track Greek spending before new aid could be released.

"Further considerations are necessary" to ensure better surveillance of Greek finances, Mr Juncker said, stressing that the new oversight had to ensure "priority is given to debt servicing".

His statement refers to a recent proposal by France and Germany to set up an account, separate from Greece's general budget, that would be dedicated to paying off Greece's massive debt. It was unclear whether this account would only manage the bailout money or whether government revenue could also be funnelled into it.

Such an account would give the eurozone more control over what Greece does with its money, after the country has repeatedly missed budget, reform and privatisation targets over the past two years. However, it could also be seen as an unprecedented interference into the fiscal affairs of a sovereign state.

The European Commission, which is in charge of economic surveillance in the European Union, is now working on a specific proposal for such an escrow account, which will be present to the ministers at a meeting on Monday.

In Athens, finance minister Evangelos Venizelos said a combination of the country's written pledges, parliament's passage of the austerity measures with a two-thirds majority and labour reform legislation were "a credible response to all those in Europe who doubt our ability to implement the program and to continue its implementation after the coming elections".

But a German government official described the conference call as "intense and at times very technical". He said the participants received information on some of the debated topics only minutes before the call started, "which because of the short notice couldn't be verified and evaluated in detail".


From Belfast Telegraph