Finland's finance minister said yesterday he had secured support for the country's approval of a Portugal bailout, removing a major hurdle for EU plans to help the debt-stricken nation.
However, Minister Jyrki Katainen said Finland would require collateral from any countries seeking a bailout loan from the European Financial Stability Facility after Portugal.
Jyrki Katainen's conservative National Coalition Party, which won the national election last month, agreed with Finland's second largest party, the Social Democrats, regarding the bailout. With the earlier support of outgoing Prime Minister Mari Kiviniemi's Centre Party, that means the rescue package for Portugal has enough backing in the EU Parliament to be approved with a clear majority.
Mr Katainen said the agreement included conditions that called for Portugal to sell off assets in order to repay loans from EU countries and to begin talks with creditors over support mechanisms.
The EU and the IMF have promised Portugal €78bn in rescue loans, but EU rules require approvals from all 17 eurozone member nations. That approval was threatened by internal Finnish politics after a surge in support for the nationalist, anti-bailout True Finns party in the country's April 17 election.
Earlier yesterday, an international ratings agency welcomed Portugal's €78bn bailout deal but warned the loan carried "significant implementation risk". Standard & Poor's said the ailing country's funding needs should be covered through mid-2013.