June 20, 2011 4:21 am

Finns to be ‘positive but tough’ on Greece

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Finland’s new government will take a “positive but tough” approach to negotiations over fresh financial aid for Greece, according to the country’s new European Union minister.

Alexander Stubb, who was named minister for trade and EU affairs at the weekend, sought to ease concern over increased Eurosceptic influence in Finland by claiming the new government would be “the most pro-European” in Finnish history.

But he told the Financial Times that Helsinki would demand stringent conditions on future support for Greece or other crisis-hit eurozone countries, including greater burden-sharing with private investors and collateral to reduce risk for Finnish taxpayers.

Finnish policy towards the EU has been under scrutiny since a surge in support for the Eurosceptic True Finns party in April’s election raised doubts over Helsinki’s support for eurozone bail-out efforts.

Six Finnish political parties agreed on Friday to form a government after nine weeks of difficult talks, with the True Finns set to be the biggest party in opposition.

The ruling coalition will be headed by Jyrki Katainen, leader of the centre-right National Coalition party, as prime minister, with Jutta Urpilainen, leader of the centre-left Social Democrats, as finance minister. She will be the first woman to hold the finance post.

Ms Urpilainen is likely to take a tough stance on eurozone policy because her party voted against the Greek and Irish bail-outs while in opposition, arguing that private investors should play a bigger role.

However, Mr Stubb, a staunchly pro-EU member of the National Coalition party, said Ms Urpilainen was an “avid pro-European” and insisted the whole government was committed to helping create a more stable eurozone.

Finland has a key role in eurozone rescue efforts because it is one of the six euro members with a triple A credit rating whose guarantees are needed for the EU bail-out fund to borrow cheaply from international markets.

It is also the only EU country that requires approval from its national parliament to take part in bail-outs, giving Finnish lawmakers a de facto veto.

Finland approved the €78bn bail-out for Portugal last month – but only after a deal between the National Coalition party and Social Democrats to push for tougher conditions on any future rescue packages.

Mr Stubb declined to comment on Friday’s agreement between France and Germany over a plans for a voluntary rollover of Greek debt, representing a climbdown by Berlin from its earlier calls for a full-scale debt exchange with extended maturities.

However, he said he expected Finland to continue working “very closely” with Germany and other countries pushing for greater fiscal responsibility in the eurozone.

Erkki Tuomioja of the Social Democrats will be the new Finnish foreign minister, a job held by Mr Stubb in the previous government.

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