Germany proposes limiting financial sovereignty of Greece

European Union leaders are gathering today for their first meeting in 2012, against the backdrop of a
deteriorating economy and the struggle to complete the Greek debt write-off
to reverse the financial crisis, Bloomberg reports.
EU chiefs arrived in Brussels today to put the finishing touches to a
German-led deficit-control treaty and to endorse the statutes of a 500
billion-euro rescue fund to be set up this year. European finance officials
yesterday discussed a deal that Greece and its private creditors expect to
complete in the coming days, after bondholders signaled they would accept
government demands for a bigger cut in their debt holdings.
Efforts to hold the 17-nation eurozone together with bolstered fiscal
rules and a stronger firewall are colliding with stalled progress in
Greece, where the crisis began in 2009. To prevent a financial collapse,
Greek bondholders have been pushed to cede more ground after agreeing in
October to take a 50 percent cut in the face value of more than 200 billion
euros of debt.
At the summit Germany has proposed limiting the sovereignity of Greece and
handing the administration of Greek financial matters to an EU Commissar, the
Financial Times reports.
The summit follows warnings at the gathering that ended yesterday in Davos
that it’s time to end the region’s debt crisis and that measures aimed at
simply containing the turmoil are no longer enough. The euro economy is set
to contract by 0.5 percent this year, according to the median of 19
economist forecasts compiled by Bloomberg.