Wednesday

1st Apr 2020

Finland on Greek collateral: 'It's not about the money'

  • Stubb: 'We understand the demand our government has posed is not easy for others to accept' (Photo: consilium.europa.eu)

Finnish minister Alexander Stubb has said his country's demand for Greek collateral is meant to defend the eurozone principle of financial responsibility. But he admitted that Finnish eurosceptics have played their part in the initiative.

Speaking to EUobserver by phone on Wednesday (31 August), EU affairs and trade minister Alexander Stubb said the wealthy northern country's demand for Greece to give guarantees for Finland's part in the second Greek bailout is not down to fear of losing money.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or join as a group

"It isn't a question of the money. It's a question of principle. It reflects a sentiment that we have that you should not be rewarded for lax public finances. That's the whole point of being in the euro ... people have to be responsible about their public finances," he said.

He noted that Helsinki's motives are not entirely pure, however.

The anti-EU True Finns party won 20 percent of votes in recent elections after bashing Helsinki's earlier pay outs to Greece, Ireland and Portugal. Eurosceptic sentiment also led the Social Democrat party, which shares power with Stubb's National Coalition party, to promise voters it would get collateral for the new Greek loan.

"Our domestic agenda is part of our election result, which gave us a mixed bag. Unfortunately there are forces surrounding the True Finns which have influenced general thinking and political thinking in the way we have seen here," Stubb explained.

Helsinki believes that its demand for guarantees falls within the letter of a July eurozone agreement on the new rescue package.

But its tough line has prompted Austria, Malta, the Netherlands, Slovakia and Slovenia to insist that if Finland gets guarantees, then they should get them as well. With financial markets watching the talks for any sign of new risk to euro stability, the dispute threatens to delay plans to implement the new bailout by the end of September.

Stubb said he is "confident" and "optimistic" that a compromise can be reached. But he added: "If we don't find a deal, then we'll see what happens ... We understand the demand our government has posed is not easy for others to accept."

As previously reported by EUobserver, Helsinki has abandoned its original pact with Greece, under which Athens was to put around €600 million of cash into an escrow account in case it defaults.

Sources in eurozone finance ministries told this website the new deal is likely to see all 16 eurozone lenders get the option to ask for collateral if they want. The guarantees could be in the form of Greek Central Bank gold reserves or state-owned shares in banks.

One contact said lenders will be discouraged from taking advantage of the option by being forced to pay a related "cost" if they do.

Another source said there could be a "gentleman's agreement" that few, if any, countries actually trigger the option. "I have the feeling that this [the collateral dispute] is beginning to go away and is becoming less important. What we are looking for is a face-saving solution for everybody involved," the source noted.

Senior finance ministry officials from the 17 euro-using countries are currently holding almost-daily telephone conferences on the subject. A contact from a large eurozone country said there is hope of a breakthrough early next week, when treasury chiefs from all 27 EU members come to Brussels for the first post-vacation meeting of the Economic and Financial Committee.

Greek debt targets missed, says independent report

Greek finance minister Evangelos Venizelos on Thursday attacked a report warning that government debt continues to increase and has already missed 2011’s budget target even though there are still four months left in the year.

Brussels tight-lipped on fresh austerity demands amid row with Athens

The European Commission is remaining tight-lipped over whether Greece will be forced to embrace still deeper cuts and further-reaching restructuring after EU, IMF and European Central Bank inspectors abruptly ended a review mission to Athens on Thursday evening.

Eurozone chiefs: Greece can wait till November

Eurozone finance ministers have kicked down a decision on the delivery of Greece’s latest tranche of bail-out cash, saying that the country can wait until November.

News in Brief

  1. Danish conservatives want Orban party kicked out of EPP
  2. Dutch finance minister repents on virus help
  3. France to house domestic violence victims in hotels
  4. Europe sends medical goods to Iran, despite US embargo
  5. Commission sets consultation on raising 2030 climate target
  6. 12-year old Belgian girl dies of coronavirus
  7. EU commission: no 'indefinite' emergency measures
  8. Denmark plans 'gradual' return to normal after Easter

Vietnam sent champagne to MEPs ahead of trade vote

A trade deal with Vietnam sailed through the European Parliament's international trade committee and after its embassy sent MEPs bottles of Moet & Chandon Imperial champagne over Christmas.

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Stakeholders' Highlights

  1. UNESDAMaking Europe’s Economy Circular – the time is now
  2. Nordic Council of MinistersScottish parliament seeks closer collaboration with the Nordic Council
  3. UNESDAFrom Linear to Circular – check out UNESDA's new blog
  4. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  5. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  6. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms

Latest News

  1. Without European patriotism, EU decline is inevitable
  2. EU cancels April Fool's 'fake news'
  3. A coronavirus 'Marshall Plan' alone won't be nearly enough
  4. Trying to think straight about coronavirus
  5. Berlin ready to airlift Greek island refugees
  6. Von der Leyen criticises Hungary, but fails to mention it
  7. Air pollution drops in Europe, but how long will it last?
  8. Human rights abusers don't stop for virus, MEPs tell EU

Join EUobserver

Support quality EU news

Join us