Monday, February 20, 2012

Greek tax revenue could flow into escrow account

Greek presidential guard, known as Evzones, takes part in a changing of the guard ceremony at the Tomb of the Unknown Soldier, in front of a riot police who secure the Greek parliament, in central Athens as few hundred protesters gathered to protest against austerity measures during an anti-government rally on Sunday, Feb. 19, 2012.(AP Photo/Petros Giannakouris)

Greek presidential guard, known as Evzones, takes part in a changing of the guard ceremony at the Tomb of the Unknown Soldier, in front of a riot police who secure the Greek parliament, in central Athens as few hundred protesters gathered to protest against austerity measures during an anti-government rally on Sunday, Feb. 19, 2012.(AP Photo/Petros Giannakouris)

Protesters hold placards that read in Italian and German " we are all together" in front of the Greek Parliament in Athens on Saturday, Feb. 18 2012. A few hundred protesters gathered in front of the Greek Parliament to protest against austerity measures. (AP Photo/Kostas Tsironis)

A protester waves a Greek flag in front of the parliament in central Athens as few hundred protesters gather to protest against the government's austerity measures during an anti-government rally on Sunday, Feb. 19, 2012.(AP Photo/Petros Giannakouris)

Employees of the Byzantine and Christianity museum hold a cardboard replica of ancient ruins which reads: ''Monument for sale'' during a peaceful protest outside the Greek Parliament in Athens, Sunday, Feb. 19, 2012. Tensions between Athens and other European capitals hit new highs this week as eurozone ministers delayed to next Monday a decision on a bailout agreement and demanded more commitments from Greece. (AP Photo/Thanassis Stavrakis)

A cyclist and a street vendor are seen under a banner which reads ''National consensus is a trick, poverty and hunger have no nationality'' during a peaceful protest outside the Greek Parliament in Athens, Sunday, Feb. 19, 2012. Tensions between Athens and other European capitals hit new highs this week as eurozone ministers delayed to next Monday a decision on a bailout agreement and demanded more commitments from Greece. (AP Photo/Thanassis Stavrakis)

(AP) ? A European Union official says some euro countries are pushing for Greece to funnel government revenue into a separately managed account dedicated to servicing the country's debts ? an unprecedented intrusion into a sovereign country's fiscal affairs.

Germany has made the creation of such an escrow account a precondition for giving Greece a euro130-billion ($170-billion) bailout.

But until now it has been unclear whether the account, which would give debt and interest payments priority over paying for government services, would only contain bailout money or also money from Greek taxpayers.

The official said Sunday forcing Greece to also channel government revenue into the account "is not off the table."

He was speaking on condition of anonymity because the plan was being discussed in an ongoing meeting of high-level eurozone officials.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

ATHENS, Greece (AP) ? Prime Minister Lucas Papademos unexpectedly headed Sunday to Brussels a day ahead of a crucial Eurozone finance ministers' meeting to discuss a euro130 billion ($170-billion) bailout necessary to keep Greece from going bankrupt.

The leaders of Germany, Italy and Greece have said they are optimistic that the deal on a second massive bailout for Athens can be clinched at the summit after months of delay, but critics have expressed doubts over Greek political leaders' commitment to austerity.

Papademos' office told The Associated Press they were not aware of any scheduled meetings Sunday and said they will share his Monday schedule later, but his departure has led to speculation he is meeting with officials ahead of the summit.

On Sunday, a working group of lower-level officials is meeting, but German sources contacted by the Associated Press denied there was a higher-level meeting going on.

Papademos' government is expected Monday to introduce in Parliament two pieces of emergency legislation seen as crucial in convincing Greece's creditors of the government's willingness to see reforms through quickly.

The legislation, which includes wage and pension cuts and a supplement to the 2012 budget making euro3.2 billion in cuts, is expected to be debated in committee Tuesday and submitted to a vote Wednesday.

More actions ? including measures passed last July but never implemented ? must be approved by the end of February. These include slashing the wages of some special categories of employees, such as special advisers to the government, as well as professionals, such as lawyers.

Also,the government must shut down some more state agencies and update the list of pharmaceuticals approved by the National Health Service. A Sunday newspaper, To Vima, estimated that by the end of the month, the government must pass some 79 laws and ministerial decrees to comply with the creditors' demands.

_______

Gabriele Steinhauser contributed to this report from Brussels.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2012-02-19-EU-Greece-Financial-Crisis/id-51b36f95b86148b69c8b01a3f433d4c0

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