FinMin says Croatia will help Greece but not with money from its budget

Croatia will take part in assisting Greece, but not with money from the budget, Finance Minister Boris Lalovac said after the government session on Thursday.

The European Financial Stability Mechanism (EFSM) is the fastest model of helping Greece, Lalovac said, adding that non-eurozone EU members would also take part in assisting Greece and in return they would receive as collateral cash in the European Central Bank account (ECB).

"In the event that this money is not returned, we have ECB collateral," Lalovac said, adding that Croatia would not make any problems.

He added there was not much time left as these agreements needed to be ratified in the eurozone today and tomorrow.

The Greek Parliament on Thursday morning adopted a package of reforms as a condition for the continuation of talks with the eurozone on EUR86 billion financial assistance.

Jeroen Dijsselbloem, president of the Eurogroup, said that eurozone finance ministers would hold a conference call on Thursday morning to discuss the outcome of the vote in the Greek parliament.

Greece requires urgent money even before negotiations are completed on a third programme of financial assistance which haven't even started and at best could be concluded by mid August.

Greece needs 12 billion euros within the next month, seven billion of which is required by July 20 and an additional 5 billion by August 5. There have been several ideas about where to get the money. The European Commission is considering reactivation of the EFSM, a mechanism set up in 2010 to financially assist EU member states. Under the mechanism, the European Commission can take out up to EUR 60 billion on financial markets on behalf of the European Union, with the implicit guarantee from the EU budget. Given that the EU's credit rating is AAA, the Commission can take out more favourable loans that a country facing financial difficulties.

"We are participating, we are not making problems, but there will be no burden on our budget," Lalovac said.

He explained that Greece is taking loans and in case it fails to pay them back, the money will be paid out from the EU budget, in which case Croatia would have an obligation to make a payment based on the collateral, Lalovac said, adding "We will not make payments, but our share will be covered by the cash in the ECB account."

"We are helping, only without the money of Croatian citizens," Lalovac concluded.

Earlier this week, Lalovac told reporters in Brussels that some projections have been made according to which approximately EUR50 million would be required of Croatia as collateral.

(Hina) its

News