EU to step up monitoring of Greek finances

Greece’s government on Tuesday sought to allay local anger at European Union plans to deploy a permanent team of foreign inspectors to monitor the country’s finances, seen by many Greeks as a humiliating surrender of sovereignty.

In a sign of the mistrust between Athens and foreign lenders after years of Greek backsliding on promises, euro zone finance ministers demanded an “enhanced and permanent presence” of EU inspectors to ensure it sticks to punishing terms of a Euro 130-billion ($172 billion) rescue package to avert bankruptcy.

The idea of foreign inspectors — dubbed “commandos” in the Greek media — based in Athens and rifling through the country’s accounts has angered ordinary Greeks, whose sense of national pride has already been battered by the threat of bankruptcy.

“It’s as if we don’t have educated or able people in Greece to govern the country,” said fruit trader Raptis Michalis, 67. But government spokesman Pandelis Kapsis said he saw “nothing dramatic” in the demand.

“There will be some teams for technical assistance in Greece, which will help collect and correctly monitor data. That’s it,” he told Greek television.

Development Minister Mihalis Chrysohoidis put a positive spin on the issue, telling Reuters a permanent presence would be both “beneficial and functional”.

“It doesn’t create any problems,” he said. “On the contrary, they will help Greece and transfer knowledge.”

"DEGRADING" 
The European Commission currently has a Greece ‘task force’ of some 50 officials, most of whom visit Athens intermittently to advise ministries on reforms needed to improve the economy’s competitiveness and chip away at the country’s debt mountain.

The team, which started work in September last year, is led by an official from EU paymaster Germany, the most sceptical of Greece’s commitment to reform the economy and shave spending and jobs from the large public sector.

The debt crisis has seen relations between Athens and Berlin descend into bitter acrimony. Greek media and street protesters have often played on memories of Greece’s World War Two occupation by Nazi Germany.

EU officials say the details of the new surveillance system will be hashed out this week.

The country has committed to 3.3 billion euros in wage, pension and job cuts, but EU leaders have lost patience with Greece’s failure to stick to earlier promises of belt-tightening.

Under the terms of the bailout, Greece’s second since 2010, Athens will also have to deposit funds to service its debt in a special account to guarantee repayments.

"The escrow account suggests the country is not reliable," said George Koumoutsakos, a Greek deputy in the European Parliament.

Koumoutsakis is a member the New Democracy party, the conservative half of Greece’s two-party ruling coalition.

With an election coming as early as April, the party and its leader Antonis Samaras are pursuing a delicate balancing act of officially supporting the bailout, while criticising its terms.

While he did not like the escrow account, Koumoutsakis reserved harsher criticism for the monitoring scheme, complaining: "The surveillance mechanism is much more degrading."

($1 = 0.7538 euros)

(Additional reporting by Daphne Papadopoulou, Tatiana Fragou and Angeliki Katantou; Writing by Matt Robinson; Editing by Giles Elgood)