Lipponen defends Finnish demands for collateral for Greek loan guarantees
SDP presidential candidate visits Brussels
Social Democratic presidential hopeful Paavo Lipponen has come out in favour of Finland’s demands for collateral in return for Finnish guarantees for bailout loans to Greece.
Lipponen said during a visit to Brussels on Tuesday that the bailout demand is part of policy set by the Finnish Parliament and government. “Finland needs this collateral”, Lipponen said.
The former Social Democratic Party leader did not want to say if the issue has hurt Finland’s reputation in Europe.
During his visit, Lipponen met with Economic and Monetary Affairs Commissioner Olli Rehn. The two discussed the future of the eurozone and ways to cope with the debt crisis for nearly two hours.
Lipponen insisted that the meeting had nothing to do with his presidential bid. He had agreed on the meeting before announcing that he would run.
Lipponen, an enthusiastic supporter of the euro, was Finland’s Prime Minister in the late 1990s. He worked hard to get Finland to join the common currency and to get into the “core” of the EU.
Although the current leadership of the Social Democratic Party is taking a more critical line, Lipponen is not criticising the present leaders.
“The fact that we have sought to get into the core of the EU has given us the possibility to wield influence, and to be critical if necessary.
Lipponen also does not want to take issue with squabbles between the Commission and the SDP’s current chairwoman, Minister of Finance Jutta Urpilainen.
In early September, Urpilainen was criticised by Rehn for not informing the commissioner about the bilateral agreement on collateral reached between Finland and Greece before holding a public press conference on the matter.
“One can only hope that communication will work in these matters.”
Lipponen concedes that Greece’s economy should have been put under closer scrutiny before the country joined the euro in 2001.
“Certainly we should have been tougher at that point. But the fact is that the euro worked well, and continues to do so. It is a good system, and it is worth keeping.”
Lipponen blames France and Germany for the weakening of euro discipline, saying that the two countries deviated from the growth and stability pact.
Rising from the debt crisis requires tough economic discipline and closer cooperation, Lipponen says. He does not see this as a move toward a federal Europe. Instead, the construction of a common policy line happens in contacts among national governments.
“Issues like euro bonds should not even be discussed before progress has been made in discipline and scrutiny. These systems need to be put into shape.”
From Brussels Lipponen moved on to Paris to meet with former European Commission President Jaques Delors.
Previously in HS International Edition:
Lipponen gets majority of votes in SDP presidential primary (14.9.2011)
Lipponen running for Social Democratic nomination for President (11.8.2011)
Merkel expects agreement to be reached in collateral issue (14.9.2011)
Katainen making no guesses about possible Greek debt restructuring (13.9.2011)
Commissioner Rehn kept in dark over collateral agreement with Greece (1.9.2011)