Possibility of EU Greek Intervention a Step Closer
February 18th, 2010Via: Irish Times:
THE PROSPECT of an EU intervention in the Greek economy drew a step closer when European finance ministers endorsed a 28-day deadline imposed on its government to show that its budget plan is yielding dividends.
With European Central Bank president Jean Claude-Trichet pushing hard for Athens to adopt new budget measures, finance ministers in the wider union backed demands from euro-area ministers for fresh cuts and taxes in four weeks if the current plan is shown to have misfired.
The manoeuvre gave Greek prime minister George Papandreou some breathing space, although Germany, Austria and Sweden are already calling for fresh austerity measures.
The EU ministers have reserved the right to impose new austerity policies on Greece by invoking a clause in the Lisbon Treaty that would deprive Athens of a vote on new measures proposed by the European Commission.
Minister for Finance Brian Lenihan suggested yesterday that he would be likely to vote with the commission. “The Government would certainly attach considerable weight to the recommendation of the commission in any such vote,” he told reporters in Brussels. “Clearly I’m not going to pre-commit how I will vote.”
Pressure on Mr Papandreou follows signs that the performance of the Greek economy was weaker than projected in last quarter of 2009, dimming the potential impact of measures already in train to bring its deficit under control. This has fanned concern among the European authorities that Mr Papandreou’s administration is “bluffing” its austerity programme.
“To the extent that a number of risks associated with the specified deficit and debt ceilings materialise, Greece shall announce, in the report to be presented by 16 March 2010, additional measures to ensure that the 2010 budgetary target is met,” the finance ministers said in a communiqué.
