Finland could withdraw from the Greek support plan if it judges that it is not obtaining satisfactory collateral conditions in exchange for its loans has warned the Finnish prime minister. Asked whether Finland could withdraw itself in the case where the collateral is refused, Jyrki Katainen has answered a clear “Yes”. “Our parliament has decided that we had to demand this as a condition for our participation” he added.
Finland’s demand of seeing it’s loans backed by assets as a necessary condition for its participation in the Greek plan, has stirred the Eurozone. Austria and Slovakia have asked for a similar treatment. The German labour minister, Ursula Von Der Leyen, has thrown a cat among the pigeons and supported Finland by suggesting that any future aid programme provided by the Fund for European Stability be systematically backed by collateral. According to her, several indebted countries had big reserves of gold as well as significant industrial participations that could be used as guarantees.
The German Finance ministry has quickly issued a statement which countered the position taken by Ursula Von Der Leyen by specifying that it was the collateral requirement was not the policy that would be applied by Berlin. During the evening, Angela Merkel rejected any potential favourable treatment that would be applied to Finland in the Greek support plan. Mrs Merkel highlighted this in front of the CDU parliament members as well as its CSU Bavarian ally.
The Institute for International Finance (IIF) was worried about the collateral demands regarding the loans for Greece. The IIF, which represented banks during the talks for a new Greek aid programme, has specified that an offer regarding private sector aid would be made public this week. “Things are being finalized” declared Hung Tran, vice General Director of the IIF, who added: “Things would get complicated if one or two countries obtain collateral from Greece. This is what all the other countries want and that could make the process become more difficult”.
