Greeks reject 'impossible' German plan for budget veto
Greece has rejected outright German proposals for the EU to hold power over its budget.
Culture Minister Pavlos Yeroulanos told the BBC it would be "impossible" for Greece to cede control of its tax and spending powers.
There are concerns the measures Greece has taken to cut its budget deficit have not gone far enough.
Meanwhile, Greece and its private creditors are close to a deal to cut dramatically the country's debt levels.
Charles Dallara and Jean Lemierre, representing the creditors, said on Saturday they were "close to the finalisation" of a deal that would see banks and investors write off about 50% of money they are owed.
They said a deal, which is necessary for Greece to receive much-needed further bailout funds, should be agreed this week.
On Sunday, Greek Prime Minister Lucas Papademos said he and his coalition partners were in "complete agreement" over the positions to adopt in the talks, both with private creditors and with the EU and International Monetary Fund officials over any subsequent bailout.
He said delays in cutting Greece's budget deficit had led to demands for greater austerity measures.'Red line'
Greek officials reacted angrily to the leaked German proposal for an EU budget commissioner with veto powers over Greek taxes and spending.
"It's going to be impossible for the Greek government to accept such a deal - I don't think it would be supported by any of the heads of the parties that are involved in the coalition," said Mr Yeroulanos.
In reality, Greece's finances are already to a large extent controlled by foreign forces. The debt-stricken country has received enormous bailouts from the EU and IMF conditional on deep cuts and fiscal reforms drawn up largely by officials in Brussels.
This new German proposal is clearly prompted by the widespread concerns that Greece is not succeeding in bringing its budget into order. Reforms have been slow and the budget deficit remains above target.
But ceding more control to Brussels would be deeply unpopular here. Most Greeks are against the austerity programme demanded by the EU and IMF.
And much popular anger is directed at Germany as Europe's paymaster general. The fact that Berlin has raised this latest plan won't soften sentiments here.
"We have been giving up quite a bit, but I think sovereignty is a red line that no-one would dare cross.
"I would rather resign as a minister than allow anybody to tell us the way we should be spending our money."
Earlier, Greek government spokesman Pantelis Kapsis told the BBC that Greece's budget was "the responsibility of the Greek government and there is no need for such measures".
He said a similar idea had been raised before and should be avoided.
"We have gone a long way in reducing our deficit and are on the right track," he added.
Under the German proposal, a budget commissioner would have veto powers over Greek budgetary measures if they were not in line with targets set by international lenders.
Greece would also legally commit itself to servicing its debt, before spending any money in any other way.Debt deal
Mr Kapsis also said the discussions between Greece and its private creditors had gone well and the two parties were "close to an agreement".
Athens is negotiating with the Institute of International Finance (IIF), which represents Greece's private creditors. The main sticking point in the discussions is the interest rate that Greece will pay on newly-issued bonds that will replace its existing debts.
The IIF said last week it wants no less than 4%, while Athens, backed by eurozone finance ministers, wants the rate to be well below 3.5%.
Agreeing a deal is a precondition of receiving further bailout funds from the European Commission, the European Central Bank and the International Monetary Fund (IMF).
Greece needs these funds to pay back more than 14.5bn ($19.2bn; £12.2bn) euros of debt which needs to repayed in March.
If a deal is not agreed, Greece could decide itself what, if anything, to repay its creditors.
This so-called disorderly default would undermine confidence in the eurozone economy and its banking system.
Some analysts believe it could result in Greece being forced to give up the euro.
European leaders are attending a summit on Monday as part of their continuing attempts to resolve the crisis.
They are looking to forge closer economic ties between member states by agreeing the details of a treaty imposing strict rules on government spending.
They are also trying to agree the details of a permanent eurozone bailout fund, the European Financial Stability Mechanism, to deal with sovereign debt crises in the future.