Although European Commissioner for Economic and Monetary Affairs Olli Rehn told reporters this morning that a collateral deal with Finland would soon no longer be a concern, his positivity is misleading.Finnish officials remain — at least by any public accounts — as zealous as ever about the need for collateral in return for the Greek bailout agreement announced on July 21. No reports have surfaced about any deal that would placate other eurozone sovereigns and sidestep a credit event.
Finnish Finance Minister Jutta Urpilainen said in the FT today, “I think we are going to debate about it, but unfortunately I don’t see that we can find a solution tonight,” in reference to today’s meeting of eurozone financial ministers. She added that she had “no idea ” when a deal would be struck, according to WSJ.
Earlier today, Rehn predicted that the bailout and EFSF agreement would be passed by early October so that the funds could be disbursed by the middle of the month.
If the EFSF is to be passed in the next two weeks, then a collateral deal must be reached to move this process forward. Any agreement will also require the approval of each of the other 16 members of the euro area.
Until such a deal is reached, the Greek bailout — and the fate of the euro — remains in jeopardy.
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