Finland insists on collateral from Greece

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Finland's prime minister insisted Thursday on his government's demand for collateral from Greece in return for aid, but said it was "legally impossible" to force Athens out of the eurozone.

"The collateral is part of the package we agreed to as a condition for our backing of the Greek bailout," Jyrki Katainen told the daily Sueddeutsche Zeitung in an interview.

"It is the sheer political reality in Finland."

On July 21, the 17 eurozone countries agreed on a new rescue package for Greece, but Finland said that it would back a portion of the loans in exchange for some form of collateral.

Finland's demand arises from the rise of anti-EU sentiment during general elections in April and growing public discontent over bailouts.

Other eurozone countries have been critical of the Finnish stance.

But "every country should decide for itself whether it wants to demand collateral," Katainen said.

"We're working on a solution which is acceptable for everyone. I'm convinced that we will able to implement everything that was agreed on at the summit on July 21."

Nevertheless, it was not possible to force Greece out of the single currency, the prime minister continued.

"Whoever says booting Greece out of the euro is the only solution has to admit it's simply not possible from a legal point of view," he said.

"Somebody would have to pay Greece's debt anyway and there would be a substantial risk that other eurozone countries would also become infected."

© 2011 AFP

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