The Finnish government told parliament that Helsinki and its Dutch allies would block the eurozone's permanent bailout fund buying bonds in secondary markets. ESM bond-buying in secondary markets would require unanimity among eurozone members and that seems unlikely because Finland and the Netherlands are against it, the Finnish government said in a report to a parliamentary committee.
A Finnish proposal that Spain and Italy should issued covered bonds, backed by state assets or future revenues, to avoid Helsinki having to demand collateral for any bailout loans, failed to find agreement last week. Prime Minister Jyrki Katainen's spokesman said the ESM stance had nothing to do with others blocking Finland's proposal. Helsinki simply did not consider secondary market purchases an effective way to counter the crisis, he said.
Dutch Prime Minister Mark Rutte said last Friday he was not in favour of using limited rescue fund resources, which run to a maximum of €500 billion, to try to turn the bond market. "The chance of that is very small because I don't see the point at all of buying on the markets because you need a lot of money to do so", Rutte said. "The instrument exists but it can only be applied with unanimous support."
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