Following the euro summit in Brussels, Urpilainen is due to start negotiations over collateral for Finland’s portion of a bailout for Spanish banks next week. The Minister would not comment on the details of the arrangement. Finland will also discuss the matter with the Netherlands, which is also likely to demand collateral from Spain on its portion of a possible bailout.
Speaking to Yle news and MTV 3 on Saturday, Urpilainen said collateral is necessary as some of the funds to Spanish banks are to come from Europe’s temporary rescue fund.
For Urpilainen, the most important decision to emerge from the Brussels summit was that each country should look after its own economy and debt. At the same time, other countries could support banks of crisis countries.
Urpilainen listed conditions for rescue funds: “Only banks fit to survive will be supported. Investors and bank owners will also shoulder their share of responsibility.” This means a willingness to incur losses, the Minister added.
Urpilainen also brought up experience garnered from Finland’s own bank crisis: “We must also be prepared to run down banks.”
No hurry for Parliament to convene
Finland’s share in bailout funding will not increase, as the country is committed to EU’s temporary and permanent rescue funds, and the European summit did not alter the responsibilities of either.
According to Urpilainen, Finland is not lending money to support other countries’ banks, but rather, to participate in the establishment of a permanent bailout fund.
The Finnish Parliament does not need to be convened in a hurry because of the summit decisions.
“Of course the Parliament should convene to discuss Spain’s bailout. However, the timing of this will depend on how negotiations with Spain progress,” Urpilainen said.
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