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Portugal Package Debated by Parliament

The Portugal bailout was hotly debated by parliament on Tuesday. The caretaker government’s Finance Minister Jyrki Katainen presented the package to the parliament, but the fiercest exchanges erupted between the True Finns and the Left Alliance. Parliament will vote on the measure on Wednesday.

Valtiovarainministeri Jyrki Katainen (kok.) esitteli eduskunnalle Portugali-tukea koskevan tiedonannon. Image: YLE

The government of caretaker prime minister Mari Kiviniemi proposed that Finland approve loan guarantees for the Lisbon government's bailout. The outgoing government’s Finance Minister Jyrki Katainen presented the issue to the legislature, saying that the sole basis for Finland’s participation in rescue measures is the prevention of a new financial crisis and another recession it would cause in Finland.

He emphasised that the economic situation is still unsettled and that another crisis is still a viable threat. He described Portugal’s situation as a critical.

He also said that Finland's line on the bailout has hardened since the election, which saw spectacular gains for the eurosceptic True Finns.

The long-discussed loan guarantees are expected to be approved by a majority comprised of National Coalition, SDP, Green, Swedish People’s Party, Christian Democrats and at least some Centre Party MPs. The vote is to be held on Wednesday.

Finland’s share of the loan guarantees in the 78-billion-euro EU-IMF bailout is about one billion euros.

At Finland’s insistence, the bailout also includes a stipulation that Lisbon must negotiate with private investors on maintaining their exposure to Portugal's debt.

“Spineless worm”

The True Finns Party chair Timo Soini sharply criticised the Portugal package during Tuesday’s debates.

He suggested that the parliament should not approve the package, but instead allocate the funds to help Finns in financial difficulties. According to Soini, the rescue packages for Greece, Ireland and Portugal do not help those countries’ people.

Soini lashed out both at the parties that had handled the issue and the ones who supported the bailout. He aimed particular criticism at the Green League and the Left Alliance.

Soini called the Left Alliance a spineless worm, among other things, and reminded the party that a negative position would not be possible for them as a government party once another bailout request rolled around.

The Left Alliance’s chair Paavo Arhinmäki countered that the party stands staunchly by its election promises.

“We are trying. We’re not that spineless worm that burrows into the ground at the first sight of difficulty and tries to hide from the situation,” Arhinmäki said.

Katainen meets with party chairs

Meanwhile talks on assembling a new cabinet continued for a fifth day on Tuesday. Some of the working groups met in the morning before the Portugal debate starts in Parliament.

After the parliamentary session on Portugal bailout, Katainen is holding talks with the leaders of the five other parties involved in the talks to assess the progress thus far.