By Agencies

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Greece will not cede control over its budget to the European Union as has been proposed by Germany as a condition for a second bailout, Greek government sources have said.

"There is effectively a 'non-paper' that was presented to the Eurogroup," one of the sources said on Saturday, referring to reports that Germany had submitted a proposal to have the eurozone assume control over the Greek budget before it receives a new bailout.
 
"Greece will not discuss such a possibility," said the source. "It is out of the question that we would accept it, these are matters of national sovereignty."
 
Earlier, UK's Financial Times newspaper said it had obtained a copy of the proposal showing Germany wanted a new eurozone "budget commissioner" to have the power to veto budget decisions taken by the Greek government if they were not in line with targets set by international lenders.
 
"Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time," the document said.
 
Under the German plan, Greece would only be allowed to carry out normal state spending after servicing its debt, the Financial Times said.
 
"If a future [bail-out] tranche is not disbursed, Greece cannot threaten its lenders with a default, but will instead have to accept further cuts in primary expenditures as the only possible consequence of any non-disbursement," the newspaper quoted the document as saying.
 
Germany’s alleged proposal comes amid discussions to finalise a second $170bn rescue package for Greece, which has repeatedly failed to meet the fiscal targets set out for it by its international lenders.