* Senior German conservative backs collateral idea
* Berlin says stance doesn't reflect govt's position
* Finnish PM: could quit Greek aid if no guarantees
* Bank lobby says more demands could delay approval
(Adds Finnish PM, German official, IIF and background)
By Stephen Brown and Terhi Kinnunen
BERLIN/TAMPERE, Aug 23 A minister in Angela
Merkel's conservative party propelled Germany into a euro zone
debate about guarantees for Greek aid, backing a demand for
collateral by Finland, which said it could quit the bailout
programme if its request was turned down.
With Finnish Prime Minister Jyri Katainen telling Reuters
his country could pull out of the Greek rescue scheme if
guarantees are not put up, Germany's labour minister proposed
using gold reserves and state industry stakes as security for
"Several states are making big efforts to service their
debt. This must be honoured. But to keep up those efforts in the
long term, collateral is needed," Ursula von der Leyen, who is
also a deputy leader of the German chancellor's Christian
Democrats (CDU), said on television on Tuesday.
German officials said her comments were not the government's
position and that the key issue was to link aid under the euro
zone rescue fund, the European Financial Stability Facility
(EFSF), to "strict conditions" regarding fiscal reforms.
"Von der Leyen is expressing a personal opinion and doesn't
have authority as a minister on this issue," said one official.
Greece agreed last week to provide cash collateral for
AAA-rated Finland's loans in a bilateral deal that sparked
requests for similar treatment from Austria, the Netherlands and
Slovakia. This prompted rating agency Moody's to warn that
Greece's bailout payments could be delayed.
Similarly, the Institute of International Finance - the
banking lobby helping to coordinate private sector involvement
in the Greek rescue scheme - warned on Tuesday that more demands
for collateral could hold up the approval process.
But the Finnish leader, asked by Reuters whether Helsinki
could drop out of the Greek aid programme if its demands were
rejected, answered: "Yes ... It is our parliament's decision
that we demand it as a condition for us joining in."
Austria has been an outspoken critic of the bilateral deal
and said on Tuesday it was one of "many" euro zone countries
with concerns about unfair treatment.
The three latest countries to voice their demands and the
Finns together account for around 11 percent of the euro zone
contribution to the new 109 billion euro ($153.5 billion) Greek
Though its share of the package is tiny, Finland punches
above its weight because of its top-notch credit rating -- which
it shares with Austria and the Netherlands -- and the fact that
its parliament is empowered to vote on funding issues.
RUMBLINGS OF DISCONTENT
Von der Leyen's bold comments on a central policy issue
contradicted earlier unattributable remarks by Berlin officials
that focused on concerns about potential copy-cat requests for
collateral from other countries.
They also reflect growing discontent in Merkel's
centre-right coalition, whose popularity is sinking in polls
following a rash of state election setbacks this year.
As German unease at funding euro zone rescue schemes grows,
polls are showing public dissatisfaction with her management of
the euro crisis in particular.
The Bundesbank issued a sharp criticism of Europe's -- and
by default Merkel's -- crisis management on Monday, saying there
was a risk of the currency bloc becoming a "transfer union" in
which Germany pays for its partners' fiscal indiscipline.
With some coalition lawmakers even threatening to break
ranks on a vote next month on the EFSF, the CDU decided to put
the euro crisis high on the agenda of its November congress.
While von der Leyen has little direct say in euro policy as
a minister, she does sit on a new CDU committee that will debate
euro zone policy ahead of that event.
She has in the past been mentioned as a possible successor
to Merkel but was passed over by the chancellor in her selection
of a candidate for the largely ceremonial post of German
president last year.
Some conservative MPs, including financial policy expert
Klaus-Peter Flosbach, have also mentioned the option of Greece
putting up gold reserves as collateral in recent interviews.
Analysts say any new signs of discord in the euro zone could
fuel market fears that leaders are incapable of keeping a lid on
Moody's said seeking collateral showed a lack of will in
some euro zone countries, putting more pressure on Germany and
France to take stronger steps to support the euro project and
driving Greece towards default.
Athens, which clinched a new rescue package at a euro zone
summit in July covering its borrowing needs up to mid-2014, is
scheduled to receive the next 8 billion euro tranche from its
first bailout package in September.
(Additional reporting by Michael Shields in Vienna, Gernot
Heller and Annika Breidthardt in Berlin and Steve Slater in
London; writing by Stephen Brown; editing by John Stonestreet)