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SDP stands behind Finland’s tough stance on “unreliable” Greece

Antti Rinne, Chair of Finland’s Social Democratic Party, admits that his opposition leftist party is of two minds with regard to the Greek bailout, but denies that there has been any lack of coordination within his party ranks about how the problem should be managed.

Antti Rinne.
Image: Yle

SDP Chair Antti Rinne says he approves of Finland’s centre-right government’s tough stance on Greece.

“The government policy is good in principle, but I am both critical and sceptical of how the new loan package will benefit the Greek situation,” he says.

In an Yle interview Thursday, Rinne said Greek debt should be neither cut nor forgiven, but some kind of extension of the loan repayment period could be considered.

“If payment schedules were pushed out to 200 years, for practical purposes it would mean the same as if we were to forgive the debt. The Greek economy was starting to recover last autumn, so they should be able to handle their debt. But payment periods and interest rates are issues that should be on the table.”

Rinne doesn’t want to see Greece leave the eurozone. He proposes that EU investment funds be employed to help balance the country’s public sector.

“The Eurogroup’s package contains the option of utilizing the European Fund for Strategic Investment (EFSI). The Greeks could use the funding to attract investment and promote economic growth. The summit mandated that more than 35 billion euros be made available.”

Debt forgiveness = goodbye collateral

Voices in the International Monetary Fund (IMF) and several economic experts have spoken in favour of partially cutting Greek debt in order to help the beleaguered country get back on its feet. Forgiving Greek debt would mean Finland could stand to lose the collateral it had separately negotiated for as a condition of earlier Greek loans.

During Rinne’s campaign for chair of his Social Democratic Party last year, he was still in favour of lightening Greece’s debt burden. But he says he changed his mind after becoming Finance Minister, after Greece proved itself a very unreliable partner.

“During my year as Minister of Finance, I followed the Greek operations closely. My confidence in their ability to resolve their own affairs decreased, as did my faith that the methods available would resolve a thing. I hope that Greece will win back some confidence now that its Parliament has approved the two creditor-inspired savings programmes,” he says.

Rinne confesses that Finland would be saddled with more liability if Greece takes on a third bailout.

“I said two weeks ago that Finland shouldn’t take on any more risk, but Greece simply won’t survive without the third loan package. We have to consider our moves carefully and make every effort we can to limit our liabilities,” says the SDP chair.

Rinne denies that the Social Democrat party line is anything but straightforward on the matter of Greece:

“Finland must not take on any more liability, we must safeguard our promised collateral and we must do all we can to relieve Greece’s humanitarian plight.”

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