German labour Minister and CDU deputy president Ursula von der Leyen said that future bailouts in eurozone countries should be covered by gold reserves or industry stakes, according to a Reuters report.This is the newest development in the debate over whether collateral should be offered to nations contributing to the Greek bailout.
Finland sparked controversy last week when it concluded negotiations with Greece over a cash collateral to be offered in exchange for Finland’s role in the bailout. Other countries quickly appealed for their own bilateral collateral agreements. Finland has said it will not participate in the bailout without collateral.
Von der Leyen’s request for collateral would apply only to future bailout agreements, not the Greek bailout proposed on July 21.
Bilateral negotiations could undermine joint EU action by dragging out the passage and implementation of bailout measures. It is unclear whether von der Leyen was advocating collateral on a bilateral basis.
Von der Leyen’s statements could also undermine the power of German Chancellor Angela Merkel, who is also a member of the Christian Democrats. Merkel has been losing domestic political support recently because of her response to the eurozone crisis.