EU discussing Finland-Greece deal
Officials from eurozone member states are discussing whether to approve a bilateral deal which would enable Finland to receive collateral in return for its participation in the €109 billion international bail-out of Greece.
The European Commission warned today that the deal between Finland and Greece – along with plans any other eurozone countries have to demand collateral – must be in the “spirit” of the agreement reached at the eurozone summit in Brussels on 21 July.
Officials from eurozone finance ministries are now assessing the details of the deal, which was reached on Tuesday (16 August), in order to ensure that the agreement is compatible with the conclusions of that summit. Leaders of eurozone member states agreed that collateral arrangements should be allowed “where appropriate”.
Today, a spokesman for Olli Rehn, the European commissioner for economic and monetary affairs, said: “It is up to euro area member states to assess if this deal between Greece and Finland corresponds to the spirit of these conclusions and does not introduce any element that could be considered a distortion. That discussion is going on.” He declined to comment on whether finance ministers would be called upon to ratify the final decision.
EU officials had hoped that the finishing touches to the bail-out agreement – which is expected to be made up of loans from the International Monetary Fund and the eurozone’s bail-out fund, the European Financial Stability Facility (EFSF) – would be made by the end of August in order to facilitate the next payment of loans to Greece next month.
However, delays now look inevitable. Other countries are considering joining Finland in requesting collateral for their part in the new Greek bail-out. Officials from Austria and the Netherlands – both, like Finland, triple-A rated – as well Slovenia and Slovakia have indicated that they too would pursue arrangements for collateral.
Rehn’s spokesman said today: “I’m not aware of any formal requests along those lines and I can’t engage in speculation.” However he reiterated the sentiments of José Manuel Barroso, the president of the European Commission, in his letter to eurozone governments on 3 August, that changes should avoid “introducing excessive constraints in terms of either additional conditionality or collateralisation of the EFSF lending”.
On Tuesday, when she announced the collateral deal, Jutta Urpilainen, Finland’s finance minister, said: “Without this arrangement, Finland won’t participate [in the bail-out].”
The arrangement will see Greece make a cash deposit to Finland, which Finland will then invest. The interest from the investment will cover Finland’s contribution to the bail-out.
Click Here: cheap Cowboys jersey