Finland’s new Prime Minister Jyrki Katainen (Nat. Coalition Party) is taking part in his first European Union summit on Thursday and Friday.
Although it is his first summit, the main topic is familiar to him – the situation in the ailing countries of the euro zone, and particularly the troubles faced by Greece were major topics of meetings of EU ministers of finance, which Katainen attended regularly.
No new decisions are expected on the Greek crisis. The EU leaders are expected simply to note the seriousness of the situation in the final communiqué of the meeting.
Diplomatic sources in Brussels said on Wednesday that negotiations involving the euro countries with private investors on the next loan package are already underway.
The euro countries decided in Luxembourg on Sunday night that the responsibility of private investors in the crisis needs to be implemented on a voluntary basis in the next Greek loan package.
This means that the individual countries are expected to persuade their own banks and insurance and pension companies to be flexible in the repayment schedule of Greek loans. The work has already been done.
German Chancellor Angela Merkel said in Berlin on Wednesday that bringing the private sector into the fray was not easy. France was especially resistant.
Merkel told Agence France Presse that few countries supported it – The Netherlands and to some extent, Finland.
The summit is to give the International Monetary Fund an assurance that the euro countries will support Greece for the next 12 months.
The IMF wants this commitment before it will release EUR 3.3 billion of Greece’s next loan payment of EUR 12 billion.
It depends largely on Greece itself if it will get the next consignment of loans, and after that, a support package of up to EUR 120 billion.
A decisive role is with the Greek Parliament, which is to vote on the economic reforms and privatization moves that the government has already agreed to.
European Commission President José Manuel Barroso proposed on Tuesday that regional subsidies could be provided to Greece ahead of schedule as a way of boosting the country’s competitiveness and employment.
Katainen and the other EU leaders are also expected to make note of economic recommendations given to each country.
The Commission says that Finland’s public finances are not on a sustainable foundation, and that growth and employment need to be reinforced.
Most member states have also initiated measures to improve competitiveness. Finland’s plans remain open because it took so long to form a government.
Also waiting for final touches is a proposal by Economic and Monetary Affairs Commissioner Olli Rehn for six new EU laws aimed at tightening the economic discipline of member states.
The passage of the legislation depends on whether or not the member states and the European Parliament can reach a compromise.
