At Friday's sitting, the European Union Affairs Committee of the Riigikogu gave its consent to the Government to the effect that the representative of Estonia in the Board of Governors of the European Stability Mechanism (ESM) supports the financial aid decision in principle for granting stability support to Greece in the form of a loan. The consent is conditional and will apply if the European Commission and other institutions confirm compliance with the preconditions set for Greece. The European Union Affairs Committee also supported the grant of a short-term loan to the extent of seven billion euro to Greece, upon compliance with the preconditions, from the European financial stability mechanism secured by the European Union budget.
The income from Greek bonds of Eurosystem’s securities programme that the eurozone countries have transferred to the special account of the European Stability Mechanism in 2014 will be used as additional security for the loan.
“Greece leaving the eurozone is not a solution, it would mean a loss amounting to hundreds of millions and may lead Europe to an extensive crisis. A write-off of loans would not be a solution either. The only option is to require Greece to continue reforms and to support the country through giving loans,“ the Chairman of the European Union Affairs Committee Kalle Palling said.
Palling added that the negotiations would not involve proprietary obligations for Estonia.
If a Memorandum of Understanding will be drawn up as a result of the negotiations then it will need the support of the plenary of the Riigikogu in order to be approved.
The Board of Governors of the ESM discusses the issues related to the launch of negotiations at today’ sitting where Estonia is represented by the Minister of Finance Sven Sester. The aim of the negotiations will be to fix in a Memorandum of Understanding the conditions related to financial aid that Greece will have to meet in order to receive stability support.
Prime Minister Taavi Rõivas, the Minister of Finance Sven Sester and President of Eesti Pank Ardo Hansson participated in the sitting of the European Union Affairs Committee.