Finland’s approval of a July 21 plan to expand the European Financial Stability Facility and bail out Greece — again — marks the latest in a series of hurdles that project is facing this week.
Finland joins Belgium, Spain, Italy, France, Luxembourg, Greece, Ireland and Slovenia in passing the measures.
Despite passage of the bailout, however, negotiations on collateral in return for Finnish participation “are still going on, but there is no clear solution at this moment,” according to Kimmo Sasi, head of the parliament’s finance committee, in Bloomberg.
Finland’s demands for collateral were incorporated into the July 21 agreement. Initially it concluded successful bilateral negotiations with Greece, but this agreement quickly came under fire when other EU countries said they wanted in on the deal.
Although finance ministers from across the eurozone have agreed that collateral should be universal, EU leaders have not yet hit upon a feasible solution that all 17 eurozone nations would approve. As long as collateral remains unresolved, it poses a credible threat to the implementation of the July 21 agreement.
Both Germany and Austria are also set to vote on the plan Finland just passed later this week. Parliaments from both countries are poised to approve EFSF expansion, although the vote could be tight in Germany as Chancellor Angela Merkel struggles to keep her coalition in order.
The Netherlands will vote on these measures next month.
Also early next month, inspectors from the European Central Bank, European Union, and International Monetary Fund will decide on the next round of $11 billion in bailout aid. A positive decision on the disbursement of this aid would signal that Greece is doing enough to meet its spending and privatization reform goals, and bode well for the prompt implementation of the July 21 measures.
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