2011-08-21

Blame the Finns, or blame social mood?

New Rift Over Terms Threatens Greece Aid
The €110 billion ($158 billion) bailout package for Greece could be disrupted if other countries seek to imitate Finland's deal on collateral, the commission, the European Union's executive arm, said.

Finland and Greece announced a deal Tuesday under which Greece would deposit about €500 million in an escrow account with the Finnish government, as a precondition for Finland agreeing to release funds from the euro-zone's bailout fund.

The bailout fund's loans are guaranteed by the euro zone's solvent member states. The latest Greek bailout deal is politically contentious in Finland, where many voters and lawmakers opposed further aid loans. To assuage fears that taxpayers' money will be lost, the Finnish government insisted on obtaining collateral from Greece in return for underwriting the rescue loans.

Finland's quest for special treatment has drawn criticism from other euro-zone members, including Austria, the Netherlands, Slovakia, Slovenia and Estonia. Several officials from those countries have said that if Finland can get collateral from Greece, then others should, too.

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