BRUSSELS (AP) -- The European Union's economic affairs commissioner says the eurozone is seriously considering forcing Greece to set up a separate fiscal account that would be dedicated to repay its debts as part of a new bailout.
Such an account, which could take in the new bailout money or even part of Greece's general government revenue, would be an unprecedented intrusion into the fiscal affairs of a sovereign state.
It was proposed by Germany and France earlier this week.
Under that proposal, revenues would go first to servicing Greece's debt before paying for government services.
Olli Rehn said Thursday such a separate account, which was proposed by Germany and France earlier this week, was "one relevant possibility of reinforcing surveillance and ensuring effective implementation of the (bailout) program."
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
BRUSSELS (AP) -- The chairman of the meeting of eurozone finance ministers says Greece has to identify an extra euro325 million ($432 million) in savings for 2012 in order meet the terms of a much-needed bailout.
Jean-Claude Juncker said Thursday the Greek parliament will also have to pass the full package of cuts and reforms on Sunday and party leaders have to make clear that they will back the measures after elections.
He said if those conditions are met, the eurozone finance ministers could give the green light to a bond-swap deal with private creditors to cut Greece's debt by some euro100 billion at their next meeting Wednesday.
The austerity measures and the debt swap deal are key conditions for a euro130 billion bailout that Greece needs to avoid default.
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