Conflict in Finland over call for collateral from Greece

Conflicting reports have emerged today suggesting the Finnish government is split over whether the country will back down on its claim to collateral in order to agree its part in the second bailout of Greece.

Reports earlier pointed to a source in Finnish minister of Finance Jutta Urpilainen’s office suggesting that negotiations were under way to retreat from the country’s previous position.

Under that, Finland wanted assets placed in escrow as guarantees against the €1.4bn it would have to pay according to the 21 July agreement with other members of the eurozone.

However, Finnish daily Hufvudstadsbladet sourced a contradictory denial, also attributed to Urpilainen, suggesting that she “rejected rumours that Finland would refrain from its demand for collateral from Greece.”

All eurozone members must agree the bailout, otherwise the proposed mechanisms, such as the EFSF obtaining new bond buying powers, cannot come into force.

Finland’s role is elevated because it is the only one of the Nordic members of the EU that has also adopted the euro as its currency.

In the past week Germany has been seen to put pressure on other eurozone members not to negotiate separate bilateral deals with Greece. But further pressure on Finland today could lead to an adjustment of the agenda for the NB8 meeting on Monday in Helsinki.

The foreign ministers of the Nordic and Baltic States are meant to be considering events in North Africa, Middle East and Balkans. However, members such as Latvia and Lithuania may wish to press the euro issue given they are currently aiming to adopt the currency by 2013-14.


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