Commissioner Rehn kept in dark over collateral agreement with Greece
Finance Minister declines comment on Rehn’s accusations
Olli Rehn and Jutta Urpilainen
The Finnish government gave no advance notice to Olli Rehn, the European Commissioner for Economic and Monetary Affairs, about the bilateral deal hammered out by Finland and Greece on collateral for Finland’s guarantees for the bailout loans being extended to Greece.
“Previously in EU matters of this level, Finnish ministers have been in contact with the commissioner well in advance”, Rehn says.
Minister of Finance Jutta Urpilainen (SDP) did not want to comment on Rehn’s accusations on Thursday.
Rehn is a key player on the Commission in fighting the debt crisis, and in ironing out the bailout packages that the collateral demanded by Finland are directly linked with.
The Commission has examined the possibility of implementing collateral of some kind on several occasions in recent years.
Minister of Finance Urpilainen announced at a press conference on August 16th that a bilateral agreement had been reached between Finland and Greece under which Greece would provide cash collateral for Finland’s guarantees of its bailout loans.
Before the press conference Finland informed a number of “key euro countries” about the agreement between Finland and Greece.
Helsingin Sanomat reported on Saturday that the Commission had not been informed. Urpilainen’s staff denied this.
On Monday Urpilainen said in an interview with the Finnish Broadcasting Company (YLE) that the Commission had been informed in advance.
Finance Ministry Undersecretary of State Martti Hetemäki said the same on Wednesday in a letter to the editor of Helsingin Sanomat. However, the information did not reach Commissioner Rehn.
“On the other hand, it is understandable that information does not always flow within administrative structures”, Hetemäki wrote.
Commissioner Rehn is surprised that he was not directly informed by Urpilainen. He said that she should have simply called him by telephone.
“I don’t want to keep arguing about the colour of a fence post when the whole fence threatens to fall. For my part I am concentrating, and continue to concentrate on setting a foundation for a solution that would get rid of this dispute over collateral, which is harming Europe and Finland. The Commission, for its part, is doing all it can so that a solution that would be satisfactory to all euro countries would be achieved quickly”, Rehn says.
Undersecretary of State Hetemäki says that the various EU institutions were informed of the agreement between Finland and Greece “in good time” before the information was made public at the press conference on Tuesday, August 16th.
According to Hetemäki, “in good time” means that the information was sent out on Tuesday morning. The press conference on the matter began at 4:00 in the afternoon.
Asked why Finance Minister Urpilainen did not inform Commissioner Rehn directly, Hetemäki said that the agreement was primarily an agreement between governments; it was not about financing the community.
After the agreement between Finland and Greece was announced, several other small euro countries said that they also want similar guarantees. The agreement was finally buried by Germany, when Chancellor Angela Merkel rejected Finland’s special privileges last week.
In recent days civil servants of various euro countries have developed a model, together with the Commission and the European Financial Stability Facility, in which the euro countries taking part in the Greek support package would have been given collateral.
Commissioner Rehn says that progress has been made. However, he emphasised that a solution requires that all countries need to “stretch in the final effort”.
Previously in HS International Edition:
Finland could get Greek bank shares as collateral (31.8.2011)
Germany “taken by surprise” by collateral deal (30.8.2011)
Finland sticks to demand for collateral (25.8.2011)
German Chancellor opposes Finnish demands for collateral for Greek loan guarantees (24.8.2011)
Finland and Greece agree on bailout terms (17.8.2011)