This event comes 2 days ahead of the official signing of the authoritative European Stability Mechanism (ESM) Treaty, whose text is not yet available in English. The setup of the ESM finds an analogy in the Federal Reserve Act, that was pushed through under the eyes of a sleepy legislative and I am most afraid that it will lead Europe in the same direction of curator ship of high finance as it has emerged in the USA.
Following the latest moves in the EU where the European Central Bank (ECB) is run by an unelected president and government heads in Greece (Papademos) and Italy (Monti) did not win power in elections but were somehow "nominated" by the EU Commission, itself an unelected body of the EU with far too wide reaching powers.
According to Deutsche Mittelstandsnachrichten, which has obtained the document, but does not give a source, Greece will have to legally commit itself to giving absolute priority to future debt service.
This is nothing else than the next slice of salami in the EU's strategy to abolish national sovereignty EU-wide, proven by the fact that Germany requires Greece to change its constitution to clear the road for unrestricted power of the creditors in the bankrupt Eurozone.
The USE Comes on Silent Soles
Here is the complete text of this document that should serve as a loud wake up call to all those who do not see that the EU wants to morph into a nanny super state that might as well carry the name United States of Europe (USE).
This is the full text about the true intentions of Angela Merkel's government.
Assurance of Compliance in the 2nd GRC Programme
According to information from the Troika, Greece has most likely missed key programme objectives again in 2011. In particular, the budget deficit has not decreased compared to the previous year. Therefore Greece will have to significantly improve programme compliance in the future to honour its commitments to lenders. Otherwise the Eurozone will not be able to approve guarantees for GRC II.
II. Proposal for the improvement of compliance
To improve compliance in the 2nd programme, the new MoU will have to contain two innovative institutional elements on which Greece will have to commit itself. They will become further prior actions for the second programme. Only if and when they are implemented, the new programme can commence:
1. Absolute priority to debt service
Greece has to legally commit itself to giving absolute priority to future debt service. This commitment has to be legally enshrined by the Greek Parliament. State revenues are to be used first and foremost for debt service, only any remaining revenue may be used to finance primary expenditure. This will reassure public and private creditors that the Hellenic Republic will honour its commitments after PSI and will positively influence market access. De facto elimination of the possibility of a default would make the threat of a non-disbursement of a GRC II tranche much more credible. If a future tranche is not disbursed, Greece can not 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.
2. Transfer of national budgetary sovereigntyAs Greece is fighting for survival and needs the next tranche of aid in coming March this document is designed to provoke heavy opposition in Greece. Europeans sleep in a democracy and as I can see no other opposition to the clear trend towards an undemocratic and unelected EU super government in Brussels the old continent is destined to wake up in a dictatorship.
Budget consolidation has to be put under a strict steering and control system. Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time. A budget commissioner has to be appointed by the Eurogroup with the task of ensuring budgetary control. He must have the power a) to implement a centralised reporting and surveillance system covering all major blocks of expenditure in the Greek budget, b) to veto decisions not in line with the budgetary targets set by the Troika and c) will be tasked to ensure compliance with the above mentioned rule to prioritise debt service.
The new surveillance and institutional approach should be formulated in the MoU as follows: “In the case of non-compliance, confirmed by the ECB, IMF and EU COM, a new budget commissioner appointed by the Eurogroup would help implementing reforms. The commissioner will have broad surveillance competences over public expenditure and a veto right against budget decisions not in line with the set budgetary targets and the rule giving priority to debt service.” Greece has to ensure that the new surveillance mechanism is fully enshrined in national law, preferably through constitutional amendment.
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