Finland has indicated its intention to block the European Stability Mechanism (Mede) – successor of the European Financial Stability Fund (EFSF) – from acquiring sovereign debt of the euro zone in secondary markets , despite the agreement adopted at the European summit last week, that the Government of Jyrki Katainen accepted.
According to a report of the Nordic Executive sent to his Parliament, the decision would require unanimity , but both Finland and the Netherlands would not be for the work. According to some sources, the Netherlands would have distanced itself from this categorical refusal, although it has also made it clear that it does not share the mechanism.
Euro zone leaders agreed last week to adopt measures to protect the monetary union and lower financing costs for Spain and Italy, although without specifying the details of how the resources of the current rescue fund (EFSF) and the Mede would be used. . They also agreed to direct aid to banks, without going through the states, and the eurozone’s renunciation of the status of preferred creditor.
The European spokesman for Economic Affairs, Simon O’Connor , explained that the unanimity in the euro zone mentioned by Finland is necessary, but not in cases where it is necessary to act “urgently to safeguard the stability of the eurozone.”
In this situation, the fund can be set in motion by a decision of the Member States that represent 85% of the subscribed capital , and Finland does not add that percentage to bring the blockade to a successful conclusion. The European Commission has shied away from assessing the threat of Finland further.
The conditions to Spain, shortly
On the other hand, the Commission has ensured that it will not be necessary to change the rescue fund Treaty to carry out the direct recapitalization of Spanish banks, but that it will be enough with a unanimous decision of the eurozone countries.
The community executive hopes to have ready “in the next few days” the memorandum with the conditions that will be imposed on the Spanish financial sector in exchange for aid, and that is being prepared by the inspectors of Brussels who are in Madrid since last week.
The EU Executive expects to have ready “in the next few days” the memorandum with the conditions that will be imposed on the Spanish financial sector The condition imposed by Germany for the direct recapitalization comes into force is to create a single banking supervisor from the Central Bank European Union (ECB), something that the countries of the eurozone have committed to do at the end of the year.
From that moment, the direct recapitalization will be possible through a “normal decision” of the European stability mechanism (ESM), as explained by the spokesman for Economic Affairs.
This will be done through Article 19 of the ESM Treaty, which allows the board of governors of the fund, where the eurozone countries are represented, to add new instruments of financial assistance to those already provided. These changes must be ratified in the parliaments of some countries, such as Germany, said the spokesman.
The EU executive still does not know if the rescued countries that have received assistance also for their banks, such as Greece, will be able to deduct it from their debt when the direct recapitalization comes into force.