Irrgang urges debate on ‘new smokescreen for Finnish collateral’

22 August 2011

Irrgang urges debate on ‘new smokescreen for Finnish collateral’

‘Either the smoke from the fifty billion euro blunder has still not lifted or Prime Minister Rutte is creating a new smokescreen around the collateral on the Greek loans. Rutte voted at the European Council Summit in favour of allowing negotiations on collateral on the loans to Greece. But our government in fact finds it an unwise idea and rejects its practical elaboration by Finland and Austria. There’s no following this any more!’ So says SP Member of Parliament Ewout Irrgang in reaction to the note to Parliament from the government concerning the commotion created by the collateral demanded by Finland in exchange for new loans to Greece. The SP is demanding a debate this week with Rutte and Finance Minister Jan Kees de Jager in order to clear up precisely what the PM voted for at last month’s summit.

Ewout IrrgangIrrgang: “Rutte said on Friday at his press conference that any kind of collateral for the Finns should also be available to the Netherlands. Yet at the same time he is saying that he doesn’t actually want any such thing. Despite this, at the European Council summit on 21st July he agreed that the Finns could go ahead and negotiate. That doesn’t hang together and needs some explanation from the Prime Minister in debate.”

According to Irrgang the fundamental problem is that the Greek package can’t work, because the underlying problem will not be solved. “Greece is bankrupt,” he says. “The country can itself no longer borrow because no commercial operator is going to lend money to a party who very probably would never repay it. So the Netherlands is now obliged to lend additional sums to Greece so that Greece can give the Finns a cash guarantee. That would indeed be unacceptable. But if every country, including the Netherlands, was given such collateral, the total package of loans to Greece would be much bigger, and once again there would be no collateral for it. So Rutte should never have agreed to allow Finland to negotiate collateral.”

In Irrgang’s view the EU member states’ heads of government would be better throwing the entire package into the bin. “This new package of loans for Greece merely brings the Greeks into further difficulties because the country’s debt will grow further while the banks who lent the money to them in the first place will have gained time to bring their reserves up to the mark. Instead of holding futile discussions about collateral the government should never have agreed to the Greek package including the possibility for Finland to negotiate over collateral.”

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