Finland threatens to withdraw support for Greece

Finnish prime minister Jyrki Katainen has threatened to withdraw support for the Greek bailout unless granted security for its loans in the form of collateral, UK newspaper the Telegraph reports.

Finland had agreed a private collateral agreement, in which Greece would give €1bn (£875m) in cash in return for the Finnish parliament’s support.

This sparked demands from Austria, the Netherlands and Slovakia for similar treatment, with both the Austrians and the Dutch criticising the deal.

Katainen said: “The Finland-Greece collateral deal cannot block [the bailout] package, but in any case we demand that collateral,” he told reporters yesterday. “It is our parliament’s decision that we demand it as a condition for us joining in.”

Though Finland’s share of the bailout package is only a tiny proportion of the total, the country punches above its weight because of its top-notch credit rating and the fact that its parliament is empowered to vote on funding issues, according to Reuters.

Ratings agency Moody’s warned on Monday that if a number of eurozone states sought collateral in exchange for aid, Greece’s bailout payments might be delayed.

It also said it expected other eurozone states to block Finland’s demands.

 

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