×

Euro Zone Calls for Tighter Greek Surveillance

The finance ministers of the euro zone want to put Greece under even tighter surveillance in return for a 130 billion euros ($170 billion) bailout, even after Athens managed to deliver on several key demandsWednesday.

A man walks outside the Bank of Greece headquarters during a demonstation against government's austerity measures in central Athens.
Aris Messinis | AFP | Getty Images
A man walks outside the Bank of Greece headquarters during a demonstation against government's austerity measures in central Athens.

Following a 3 1/2-hour conference call involving the finance chiefs of the 17 countries that use the euro, the ministers greeted the strong assurances that the country had found a further 325 million euros in cuts on top of austerity measures already agreed.

The ministers also welcomed news that the leaders of the main Greek political parties will implement promised cuts and reforms even after elections expected for April.

However, in a sign of the deep distrust that has built up — especially among rich euro nations light Germany, the Netherlands and Finland — Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the finance ministers' meetings, said that better surveillance mechanisms had to be set up before new aid could be released.

"Further considerations are necessary regarding the specific mechanisms to strengthen the surveillance of program implementation and to ensure that priority is given to debt servicing," Juncker said.

The statement appeared to be a reference to a Franco-German proposal to set up an account, separate from Greece's general budget, that would be dedicated to repaying Greece's massive debt. It was unclear whether this account would only manage the bailout money or whether government revenue could also be funneled into it.

Such an account would give the euro zone more control over what Greece does with its money after the country has repeatedly missed budget, reform and privatization targets over the past two year. However, it could constitute an unprecedented interference into the fiscal affairs of a sovereign state in Europe.

Finance ministers held their conference call amid doubts in some countries over whether the 130 billion euro bailout, which comes on top of a 110 billion euros rescue granted in May 2010, can ultimately save recession-ridden Greece.

Yet, despite rumors that the bailout could be delayed until after the elections, Juncker said he expected the finance ministers "to be able to take all the necessary decisions" at their next meeting on Monday.

Greece does not have much time to secure the bailout because it risks defaulting on a 14.5 billion euros bond redemption in late March.