Greece may have worked out a deal with Finland to collateralize Helsinki’s share of its bailout, but Moody’s is not happy about the arrangement and says it will have a negative effect on Greece’s already low credit rating.
Moody’s declaration Monday was sure to bring further difficulty to an already-tough deal. As previously reported by AdvisorOne, Greece and Finland had worked out a deal separate from other euro zone contributors to Greece’s rescue package for Athens to provide collateral in exchange for Helsinki’s share of the funding. Once the deal became public, however, other nations began clamoring for securitized contributions—among them the Netherlands, Austria and Slovakia.
A spokesman for the European Commission (EC) said Friday that the agreement was being examined, and also on Friday Bloomberg reported that Finland said it was unlikely that any country would get collateral, and thus was having second thoughts about participating in the bailout package at all. Reijo Karhinen, OP-Pohjola Group CEO, was quoted in the report saying, “For the first time I’m concerned the euro system may fail.”