Euro countries angered at Finland for secrecy over Greek collateral pact

Dissatisfaction also reported in Commission

Jutta Urpilainen

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The smaller countries of the common European currency, the euro, and the European Commission, are reportedly upset at Finland for not disclosing the content of the bilateral agreement between Finland and Greece on collateral for Finland’s loan guarantees. The matter did not come out before Minister of Finance Jutta Urpilainen (SDP) announced the agreement at a press conference on August 16th.
      The Social Democratic Party said that the key eurozone countries were informed about the result of the negotiations.
     
“Negotiations have been held with others along the way, also during the negotiations that we had with Greece. We have tried to act in an exceptionally open manner in this guarantee issue, and we’ve told other countries what Finland’s stand is”, Urpilainen said on Friday.
      Prime Minister Jyrki Katainen (Nat. Coalition Party) said in an interview with Helsingin Sanomat on Friday that information on the content of the agreement had been given in advance to only a few countries.
     
The eurozone countries agreed after the July EU summit that Finland and Greece should consider a suitable collateral arrangement with each other.
      The result of these talks – an agreement between Greece and Finland on cash collateral, nevertheless came as a complete surprise to The Netherlands, for instance. The country’s Prime Minister Mark Rutte imagined that Finland and Greece would discuss collateral involving goods and property.
      The Dutch felt that Finland should have brought the agreement before the other eurozone countries before it was made public. Germany said last week that the Finnish and Greek agreement was not acceptable.
     
Information about the collateral agreement also seems to have filtered through to Brussels more slowly than officials there would have liked. Sources at the European Commission have told Helsingin Sanomat that they had no information on the content of the Finnish-Greek arrangement.
      The Finnish Social Democratic Party disputes this. According to Urpilainen’s staff, the Commission was kept informed about the content of the agreement.
      Tapio Raunio, Professor of Political Science at the University of Tampere, sees the actions taken by Finland to be strange.
      “This does not tend to increase confidence in Finland. Finland and the other small countries have raised much noise on previous occasions, if France and Germany have agreed on something between each other and then brought it to EU tables”, Raunio says.
     
The mid-month press conference was arranged at great haste. Urpilainen showed up there in the middle of the SDP’s summer meeting. Few details were given out about the conference, and the agreement with Greece was still incomplete.
      “We wanted to inform Finnish taxpayers before the news came to Finland through international news agencies. We felt that it would be fair we would tell about it in Finland ourselves, and that Greece would inform its own media on what the end result of the negotiations is”, Urpilainen said on Friday, explaining why the incomplete agreement was announced.
      She also said that demanding collateral was a project of the whole Finnish government – not just the Social Democratic Party, and that this view also had the endorsement of Parliament.
      “I am somewhat worried if a feeling were to develop among an elite, as it were, that we don’t have to listen to the opinion of the people.” Urpilainen warned that such an attitude could turn the economic crisis into a political crisis.


Previously in HS International Edition:
  Austria wants to link bailout collateral with banks’ risks (22.8.2011)
  Finland and Greece agree on bailout terms (17.8.2011)
  Finland, Austria, and The Netherlands consider options for joint collateral for Greek loan guarantees (26.8.2011)
  German Chancellor opposes Finnish demands for collateral for Greek loan guarantees (24.8.2011)

Helsingin Sanomat