Finland’s Stubb Predicts Very Difficult Greek Bridge-Loan TalksOtt Ummelas and Hans Nichols
Many euro-area countries will have challenges considering bridge loans for Greece, an issue that is likely to lead to “very difficult” negotiations, Finnish Finance Minister Alexander Stubb said.
“There are many member states that have a problem with this because we cannot give money without clear conditionality,” Stubb said in an interview with Bloomberg Television on Monday. As he arrived later for a meeting of euro-area finance ministers in Brussels, Stubb said: “I foresee those negotiations being very difficult.”
Euro-area leaders ended an all-night summit with a deal to help Greece out of its financial crisis. While the agreement averted a worst-case outcome for Greece, it only established the basis for negotiations on an aid package.
Greece “will probably find a way” to solve short-term financing problems, Stubb said in the Bloomberg interview. He added that Greek banks will not be able to count on the European Stability Mechanism for a potential bailout.
“ESM is not going to be there for the Greek banks, that’s for sure, because the ESM negotiations will take a while,” the Finnish finance minister said. The overall aid package could include 25 billion euros ($28 billion) to recapitalize Greece’s weakened financial system.
The European Central Bank held off from expanding its aid for Greek lenders on Monday, signaling a desire to wait for the country’s lawmakers to approve reforms linked to a new bailout. The move came after Prime Minister Alexis Tsipras gave in to European demands for immediate action to qualify for as much as 86 billion euros of assistance that Greece needs to stay in the euro.
The deal goes “quite a lot further” than creditors’ proposals rejected by Greek voters in a referendum this month, Stubb said. He said the whole package must first be passed by Greek lawmakers before ESM negotitions start.