Many countries have been seeking collateral for their contributions to a second Greek bailout. Finland's original deal of getting €600 million in return for its €1.4 billion part in a €109 billion new bailout is allegedly in jeopardy, and now the Nordic country is reportedly eyeing a stake in Greek real estate or shares in state assets.
Finland's demand of cash up front was derided by the International Monetary Fund (IMF) and the German finance ministry, which have been the two most important gatekeepers of the Greek bailout.
A marathon of teleconferences has allegedly been held to persuade the Finns to drop their cash demand amid fears that it could trigger several countries to ask for the same and derail the whole bailout, say diplomatic sources in Brussels.
"Now that the Finnish-Greek deal wasn't accepted by others, it's up to all eurozone members to find an acceptable model," Finland's finance minister, Jutta Urpilainen, told Finnish reporters yesterday.
In a move that seems to contradict the above statement, Urpilainen said at a press conference this morning that all options for collateral were still on the table.
A working group on the Greek bailout which includes officials from Finland, Austria and the Netherlands is reportedly trying to work through different models of collateral. Despite reports of a Greek-Finnish deal, Greece has long been reluctant to hand over cash for a bailout and the EU working group is currently looking at Greek state assets instead.
"You cannot sell all privatisation assets right away, that could take years. So our proposal is that you get assets into the privatisation agency and before you sell them, you use them for collateral," a Finnish official reportedly said today.
Greece's state assets have been hanging around the beleaguered economy's neck for some time and sources say foreign governments taking stakes in utility companies and state-owned real estate is a much fairer solution than demanding cash payments, which would put Athens back in rating agencies' bad books.
Greece has been trying to sell some of its state assets as part of an agreed EU/IMF austerity package, but so far this has attracted little foreign interest. The Greek parliament has tried to rush through a contested gambling bill so that it can sell off lucrative state lottery OPAP.
"Logically state assets come to mind. Collateral does not strike us as the first step," an EU source told EurActiv.
Other countries in the battle have been butting heads with Finland over its attempts to clinch a bilateral deal without the agreement of all the nations involved.
"Even though the Netherlands is not a supporter of collateral, we strongly insist on the concept of equal treatment of all eurozone countries. If a member state obtains collateral, then the Netherlands, just like a number of other members, will want the same," Dutch Finance Minister Jan Kees de Jager told his parliament on Monday, when the Finnish cash deal made headlines.
De Jager also rejected suggestions early this week that the Greek-Finnish deal was lawful.
Moody's rating agency warned on Monday that the Finnish cash deal would delay Greece's bailout and hamper the country's attempts to manage its debt mountain.
Timo Soini, the leader of the True Finns, a nationalist party in the Finnish parliament, requested earlier this year that the Greeks hand over one of their islands, Rhodes, in exchange for Finnish taxpayers' contribution to a Greek rescue.
Greece clinched a new rescue package at a summit in July which is thought to cover its borrowing costs until 2014. In September the country is set to receive the next eight-billion-euro tranche of its first bailout package.
Claire Davenport
