Germany: Finland-Greece debt deal needs eurozone OK

22nd August 2011, Comments 0 comments

Germany on Monday said that a deal Finland struck with debt-wracked Greece whereby Athens would provide collateral in exchange for loan guarantees required the consent of all 17 eurozone members.

The agreement "must be approved by the other eurozone member countries," a finance ministry spokesman told a regular government press briefing.

"Such a bilateral accord may not be agreed to the detriment of the others," referring to the other countries coming to the aid of Greece.

Government spokesman Steffen Seibert said the arrangement "required discussion" within the crisis-rocked eurozone.

"This accord must be explained to the other eurozone countries," he said, adding that Berlin had not yet received a copy of the pact between Finland and Greece.

Seibert said any discussion about possible guarantees should be conducted "not in the media but in eurozone institutions."

Finland, one of only six EU nations with a top AAA credit rating, warned it would seek collateral for its portion when eurozone leaders agreed a 160-billion-euro ($230 billion) rescue plan for Greece in July.

Germany is the biggest contributor to the package.

Helsinki hammered out a deal with Athens last week, raising immediate objections from Slovakia, Austria and the Netherlands, which said they would now seek the same guarantees for their portion of the loan.

Greece on Sunday called on the European Union to show leadership to stem a growing row over the deal.

Finance Minister Evangelos Venizelos urged European officials in a letter to send "clear and positive messages" to the international markets and European countries over the accord.

"Technical solutions are easy to find, under the condition that the credibility and the effectiveness of the program will not be affected," Venizelos said in the letter released by the finance ministry.

"The issue is mainly political and must be handled as such so that clear and positive messages are always sent to international markets and European societies," he said.

The letter dated Saturday was sent to eurozone finance ministers as well as Eurogroup chief Jean-Claude Juncker, EU Economic Affairs Commissioner Olli Rehn and European Central Bank chief Jean-Claude Trichet.

Venizelos told an Athens radio station Friday that it would be up to the Eurogroup to find a solution if there were requests for collateral from any other country.

© 2011 AFP

0 Comments To This Article