Reuters logo
No new euro plan for bond-buying - Finland's PM
August 8, 2011 / 3:24 PM / 6 years ago

No new euro plan for bond-buying - Finland's PM

HELSINKI (Reuters) - Finland’s Prime Minister Jyrki Katainen denied on Monday that Germany and France had or could have made any new commitments for the euro zone rescue fund to buy bonds of weaker member states.

“No two (euro) countries can decide on behalf of others, and they haven’t decide between themselves on buying some country’s bonds either,” Katainen told Reuters in an interview.

Weekend comments by German Chancellor Angela Merkel and French President Nicolas Sarkozy triggered speculation that they were preparing for the European Financial Stability Facility (EFSF) to buy bonds from countries like Italy and Spain.

Finland’s position on the European debt crisis matters not only because it is a creditor nation with a triple-A rating but also because its parliament, unlike most others in the European Union, can vote on funding matters.

Since assuming the premiership in June, the former finance minister’s role has been to persuade other parliamentarians to keep Finland on a pro-Europe course in the face of opposition from parties such as the nationalist True Finns.

Katainen said he was confident the Finnish parliament will pass a euro zone rescue plan adopted in July, although he could not say when the vote would take place.

“I would say it will get through well. These policies have had support from government and the Grand Committee as well,” he said, referring to parliament’s powerful decision-making group.

“I don’t have the date for Finland yet, but it will be right after the legislative preparation is done,” he said.

In July, euro zone leaders agreed on a second rescue package for debt-stricken Greece and gave the EFSF broader powers, including the ability to buy bonds in the secondary market in case of a crisis.


Katainen, whose right-leaning but pro-Europe coalition took power in June, has also called for strict conditions to be applied to euro zone rescue plans such as collateralisation and private sector participation.

He opposes the idea of a common euro zone bond, which has been raised by some European policymakers.

Katainen said Finland should be prepared for “significant questions” and more painful policy decisions as Europe seeks ways to manage the region’s financial crisis.

“There will soon be very fundamental discussions about new ways of increasing economic integration,” he said. “Although we have been pro-integration, all will not necessarily be as we would like.”

Katainen praised Italy’s plan to accelerate moves to consolidate public finances and reform its economy.

“From what I’ve heard about Italy’s consolidation package and other structural actions, they’re very impressive. .. I think that they improve Italy’s situation and stabilise the euro economy,” he said.

Katainen also said he believed the recent market turmoil was partly due to thin, holiday trade.

Editing by Catherine Evans

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below