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UPDATE 1-Finland sceptical on cost of giving Greece more time
September 18, 2012 / 1:05 PM / 5 years ago

UPDATE 1-Finland sceptical on cost of giving Greece more time

* Finnish minister cautions on giving Athens time

* Says Spain not in such bad shape, will wait and see

* Questions need for “impossible” EU treaty change (Releads with comments on Greece, Spain)

By Padraic Halpin

DUBLIN, Sept 18 (Reuters) - Finland is sceptical about giving Greece more time to implement its bailout reforms, especially if this will cost more money, although nothing should be ruled out yet, the country’s European Minister said on Tuesday.

Greece wants two more years to push through the terms tied to its aid package and the Institute of International Finance (IIF) earlier joined a chorus that includes the IMF in advising that Athens be allowed soften the impact of the tough austerity.

However following reported comments by Austria’s Finance Minister on Sunday that Athens would only get “a few weeks”, a further tone of caution was added from another of the euro zone’s strict creditor countries.

“We are sceptical about giving more time, especially if it means more money, but we should not exclude any options at this stage,” Alexander Stubb told reporters after speaking at an event in Dublin.

While the head of the IIF said Spain should seek aid in light of the ECB’s plan of a potentially unlimited bond-buying programme, Stubb said he did not think Spain was in such bad shape but that he was reluctant to tell Madrid what to do.

“So far, so good and we should give a lot of credit. Whether this will be enough or not, we don’t know so we’ll just have to see. Moving up to the European Council in October, it’s going to be crucial to get things right, including on Spain,” he said.


In a speech entitled ‘Finland in Europe’, Stubb also questioned the need for a change to the European Union’s treaty, saying such a move would require too much time and raise uncertainty.

He was referring to calls by European Commission President Jose Manuel Barroso last week for the European Union to be turned into a ‘federation of nation states’, a vision he said would require an overhaul of the Lisbon Treaty.

“I think the method of traditional treaty change has come to the end of their road. I think it would be virtually impossible to push through treaty change and I think it actually might put the focus on the wrong foot,” he said.

“I liked a lot of the stuff in Barroso’s speech but the focus on ‘we will need treaty change’ is the wrong one when we have something probably a lot bigger at hand... It’s important to look at what you can do without treaty change.”

A significant treaty change would trigger referendums, which would increase uncertainty, he said.

Some members of the European Parliament, including committed pro-Europeans such as former Belgian prime minister Guy Verhofstadt, have also spoken out against Barroso’s call, saying the EU needed to deepen the structure already in place, not become a federation of nation states.

Barroso, a former Portuguese prime minister, has said his office would flesh out proposals for the future shape of the EU, including the legal changes required to become a federation, before mid-2014.

Stubb also said the European Commission was right in seeking integrated supervision over the region’s banks, but said such a move would be “toothless” without the power to close non-viable banks.

“Bank resolution needs to be a part of the plan,” he said.

The Commission wants to give the European Central Bank responsibility for monitoring all the euro zone’s banks, although Germany wants only the biggest, systemically important banks to come under ECB supervision. (Additional reporting by Ritsuko Ando; Editing by Ron Askew)

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