UPDATE: Parliament passes expansion of Finnish loan guarantees

Opposition united against expansion of European Financial Stability Facility

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The Finnish Parliament on Wednesday approved a set of changes to the European Financial Stability Facility (EFSF), which effectively increases Finnish guarantees to EUR 14 billion. The vote was 103 to 66, with 30 MPs absent. The government parties, the National Coalition Party, the Social Democratic Party, the Left Alliance, the Greens, the Swedish People’s Party and the Christian Democrats were united in the vote.
      The opposition True Finns, the Centre Party, and the two-member Left Group, which recently split from the Left Alliance, voted against the measure.
      Parliaments of all eurozone countries are voting on the EFSF. The decisive vote in Germany is tomorrow, Thursday.
     
On Tuesday Parliament held an intense debate on both the EFSF and the possible debt restructuring that Greece might be facing.
      The Centre Party’s Timo Kalli said that the government’s proposal for expanding the EFSF might buy more time, but he feared that it would prove expensive.
      “Another option would be to make a controlled debt arrangement. The time is ripe”, Kalli said.
     
In the view of Ben Zyskowicz (Nat. Coalition Party) the proposal by the Centre Party and the True Finns for controlled debt rearrangements would, in reality, amount to an uncontrolled debt rearrangement.
      “If we pull out the tubes now, it would mean a risk of infection into other countries through the banking system”, he said.
      Kimmo Sasi (Nat. Coalition Party) says that opposition talk of debt rearrangement, and cutting Greece’s debt by 50 per cent would mean that Finland would immediately lose EUR 500 million.
     
True Finns MPs Timo Soini and Vesa-Matti Saarakkala are concerned to hear that the proposed increase of the EFSF guarantees would not be enough, and that the size of the facility might be quadrupled.
      “Soon more money will be put into this thing, and then again the same speeches about how Finnish taxpayers are being rescued with this. Finnish taxpayers will be saved when this chamber announces that we will stay out”, Soini thundered.
      Antti Rantakangas (Centre) said that the Social Democrats and the Left Alliance sound happy about the opportunity to give more money to countries in crisis. SDP MPs pointed out that the first decisions on support for Greece were made at a time when the Centre was still a government party.


Previously in HS International Edition:
  Rehn: new recession can be averted (26.9.2011)
  Lipponen defends Finnish demands for collateral for Greek loan guarantees (21.9.2011)

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