09 May 2012

Bloomberg: Europe won’t accept laxer Greek bailout terms

Swedish Finance Minister, Anders Borg, said Greece won't be able to ease terms of its international loan package, as the euro area's most indebted nation faces the prospect of a government led by anti-bailout politicians.

“It will be very difficult to backtrack in the International Monetary Fund programme”, Borg, whose country stands outside the euro, said. “It’s not acceptable to lower demands.”

A surge for anti-bailout candidates in Greece’s May 6 election has reignited European concerns over the country’s ability to stick to the terms of its two bailouts since May 2010. With parliament split, the country at the centre of the area’s debt crisis is again facing the risk of a euro exit. “They have a substantial financing need and therefore they must provide the necessary reforms to become sustainable in the long term”, Borg said.

Separately, Borg said his country is “sceptical” on re-capitalising the European Investment Bank, which has been proposed as an idea to ease the region’s crisis. “They have the opportunity in the current framework to do more and this should be used as a first option”, he said.

In Finland, Finance Minister Jutta Urpilainen said that while primary measures to ease Europe’s debt crisis must be structural, regional financing through the EIB is one “possible path”. Finland won’t decide on the issue now, she said at an event in Helsinki. Prime Minister Jyrki Katainen also said at the same event that he wouldn’t “dismiss” the idea of more financing through the EIB, though it won’t be “decisive” in solving the region’s problems.

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