Finland received the first installment of collateral payments that it demanded from Greece as a condition for contributing to the second bailout of the debt-burdened southern European nation.
Finland was paid 311 million euros ($412 million) by Greece, the Finance Ministry in Helsinki said today in a statement on its website. The total payments to Finland are 925 million euros, paid gradually as Greece gets the funds from its second bailout, according to the ministry.
Finland was the only country to take the collateral deal reached in October, after more than four months of talks. Finance Minister Jutta Urpilainen sought the extra assurances to limit liabilities to taxpayers in the northernmost euro country.
After discussions with Greek banks involved in the deal, the Finnish ministry will publish parts of the agreement originally labeled confidential, it said. Finland’s government this week survived its second no-confidence vote in parliament over the euro rescue.
Under the accord, Greek bonds will be transferred from Greek banks to a trustee, which will sell them and invest the proceeds in AAA rated bonds with maturities of 15 to 30 years. In exchange, Finland pays upfront its share of the capital of the permanent rescue fund, the European Stability Mechanism.
One of four AAA rated euro members, Finland’s 10-year bonds have the smallest spread with German similar-maturity securities within the single currency region. The spread was unchanged at 41.3 basis points at 4:08 p.m. in Helsinki.
Finland’s parliament will begin debate on the ESM founding treaty on May 3. The country won’t demand collateral for any payments made from the permanent fund, which is scheduled to begin operation on July 1, Urpilainen has said.
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