Four more eurozone countries ask Greece for collateral

The Netherlands, Slovenia, Slovakia and Austria want same terms as Finland

The eurozone assistance package for Greece agreed last month is in danger of being undermined after four more countries suggested on Thursday they want Athens to provide collateral, as it did in a separate agreement with Finland, for it to receive their share of the 109-billion-euro bailout.

The requests from Austria, the Netherlands, Slovakia and Slovenia led to Finance Minister Evangelos Venizelos coming under attack from New Democracy, which claimed he had “opened Pandora’s box” by coming to an arrangement with Finland.

The first country to object to the Greek-Finnish deal was Austria. “If there is a model for collateral, Austria would also make a claim,” said Finance Ministry spokesman Harald Waiglein.

Slovakia followed this train of thought, arguing that Finland should not have different lending terms from other eurozone members. “I consider it unacceptable for any country to not have the collateral if other countries have it,” said Finance Minister Ivan Miklos. “Because if this is a loan, and that is what everyone is calling it, the debtor should have no problem offering collateral for the loan.”

Even though Finland had been the only eurozone member to make it clear at the July 21 summit in Brussels, where the deal for Greece was agreed, that it wanted collateral to form part of the agreement, the Netherlands and Slovenia added their voices yesterday to those calling for guarantees from Greece. The five countries’ combined contribution amounts to 10 percent of the 109 billion euros Athens is due to receive.

Athens made it clear to Finland that it was not willing to provide state assets as collateral, resulting in a rather complicated deal being agreed. Greece will deposit cash equivalent to a large chunk of the money it is to receive from Helsinki in a state account that Finland will use to invest in AAA-rated bonds. The interest generated will raise the amount to match the required collateral. Finland will return the money, plus interest, once the bailout loan is repaid, Finance Minister Jutta Urpilainen said.

Greek Finance Minister Evangelos Venizelos said that this deal still had to be approved by the other eurozone members. New Democracy slammed his handling of the affair, claiming that the minister had celebrated the eurozone deal too early and had not heeded the conservatives’ warnings. “He does not know how to react or what to say,” said ND spokesman Yiannis Michelakis.

ekathimerini.com , Thursday August 18, 2011 (23:20)  

ekathimerini.com | Four more eurozone countries ask Greece for collateral