Bad News: More Countries Are Jumping On The Greek Collateral Bandwagon

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Photo: Eric Lewis on Flickr

Come one, come all — demand your collateral for the Greek bailout!According to Bloomberg, Austria, the Netherlands, Slovakia, and Slovenia are all considering demanding bilateral collateral agreements with Greece in exchange for their part in the most recent bailout, after Finland concluded collateral negotiations yesterday.

Finland demanded that Greece provide insurance for funds provided by Switzerland through the European Financial Stability Facility during bailout negotiations in July.

But now it seems that everyone is getting on the bandwagon.

Newly publicized demands for collateral by other countries threaten the quick passage of the second Greek bailout. Bilateral negotiations take time to conduct, and must also be approved by the European Council as a whole.

European Council President Herman Von Rompuy and European Commission president Jose Manuel Barroso have publicly beseeched countries to pass the bailout agreement fast, particularly since most European governments are taking their usual August vacations.

Further delays could aggravate already acute funding problems in European banks, and may be what’s sending the markets tumbling this morning.

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