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Finnish Collateral Deal Needs Euro Zone Approval – Greek Finance Minister

Evangelos Venizelos
Greek Finance Minister Evangelos Venizelos said Thursday that a deal under which Greece would provide Finland with collateral in exchange for fresh aid was still subject to approval by other euro-zone member states.
“The financing scheme which we reached in our discussions with the Finns is subject to approval by the other member-states of the euro zone,” Venizelos said in a statement.
“The relevent discussions began today at a technical working group level and will continue next week among finance ministry deputies,” the statement added.
On Tuesday, the Greek government announced that it had reached a deal with Finland on collateral needed to secure the Nordic country’s participation in a new bailout for Greece.
Under the terms of the deal, Greece will deposit about EUR500 million in an escrow account with the Finnish state, as a precondition for Finland to release funds to the European Financial Stability Facility, Europe’s temporary bailout fund, which is being used to finance fresh aid for Greece.
That cash would be invested in triple-A securities over a period of about 25 years. Taking into account both the principal and accumulated interest, the Greek collateral would be equal to Finland’s contribution to the EFSF, or about EUR1.6 billion to EUR1.8 billion, according to a Greek finance ministry official.
But the deal has also drawn criticism and questions from other euro-zone members. Earlier Thursday, both Austria and The Netherlands said they would be interested in pursuing a similar deal, while Estonia has criticized the deal in principle.
Other countries, such as Slovakia and Slovenia have also raised questions over the deal.
(source: Dow Jones)

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