August 16, 2011

Finland asking for a "deposit" to Greece in exchange for bailout

For those who have doubts that the current Euro situation is getting crazier by the day please consider Finland and Greece agree on loan guarantees

Finance Minister Jutta Urpilainen said in a Tuesday press conference that Finland and Greece have reached common ground on loan guarantees demanded by Finland for its participation in the Greek bailout package. The agreement still requires approval from other eurozone states.

The Finnish and Greek Finance Ministries have agreed that the Greek state will transfer a sum to the Finnish state, which, together with interest on that sum, will serve to guarantee Finland's share in the bailout loan to the troubled southern state. 


The guarantee sum would, however, be only a fraction of the money that Finland is contributing to the rescue package. 

Urpilainen has not divulged a concrete sum, because that is still being negotiated. 

So Finland agrees to lend let's say 10 Euro to junk Greece and in exchange will get a deposit of 1 Euro which will keep as a guarantee that Greece will pay back the other 9 euro, with interest, at an agreed upon rate.
This is clearly a political trick to avoid anti-bailout resentment in the population as per the practicality of the agreement, it is absurdly laughable. Another proof of desperation rising in Europe and the complete ineffectiveness of any government in dealing with the situation aside from implementing ridiculous publicity stunts.
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