By Martin Banks - 19th May 2011
It is hardly a secret that Greece is on the verge of defaulting
The commission has been urged to "come clean" over the €60bn European financial mechanism which may be used to fund Greece in the event of a default.
UKIP MEP Marta Andreasen said, "I want to know which existing budget lines would be cut to honour the guarantee given towards the Greek debt."
The former commission chief accountant says that those countries found by the Court of Auditors to have incurred in budget "irregularities" should have funding blocked.
The UK deputy's comments come as the man leading the IMF mission to Greece warned on Wednesday that the country's plans for reducing its budget deficit will fall short without further reform.
Greece must cut its budget deficit to 7.6 per cent of GDP this year to meet the terms of its EU-IMF bailout.
But Poul Thomsen, of the IMF, said that it would struggle to get the deficit below 10 per cent at the moment.
Elsewhere, the head of the eurozone finance ministers Jean-Claude Juncker, said this week that a "soft restructuring" of Greece's debts was a possibility.
Andreasen said, "It is hardly a secret that Greece is on the verge of defaulting on its loan repayments. Eurogroup chiefs have indicated that default is indeed preferable to Greece leaving the eurozone.
"This means only one thing: the €60bn financial mechanism created last year, and which is guaranteed by the EU budget, will come into play.
"The problem is that the commission has failed to say which lines in the EU budget will be cut to pay for the fund."
She added, "When I asked the commission what lines would be cut I was met with stone-faced silence.
"It is bad enough that taxpayers' money is being used at all for default debts.
"It is also alarming that if such a huge figure is going to come out of the EU's own budget they have not got a clue about which specific expenditure they would cut to balance the EU accounts."
She asked, "Are they going to top up the budget in order to honour the guarantee?
Andreasen, a budget committee member, also says that countries who have incurred irregularities should have their money blocked "until they come up to scratch".
"This would ensure that income could be generated for those who genuinely need it and will use it properly," she said.