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Rehn: Guarantees sought for new Greek loans

Olli Rehn - Confirmed preparations underway for guarantee scheme
Olli Rehn - Confirmed preparations underway for guarantee scheme

EU Commissioner for Economic and Financial Affairs Olli Rehn has said a number of EU states are seeking guarantees to cover any additional lending to Greece.

Sources in Brussels, Berlin and Helsinki told Finnish television that last Friday's 'secret' meeting in Luxembourg only discussed the unfolding Greek situation.

Political opposition to further bailouts in Germany and Finland in particular have led to the idea of guarantees being sought.

Among the ideas under discussion is the transfer of up to €50 billion worth of Greek government-owned assets to a private holding company - to be owned by the creditor countries - which would sell off the assets to repay the additional loans.

Greece has been falling behind in its EU/IMF fiscal adjustment plan, which requires large-scale sell-offs of state assets to raise cash.

The scheme would be similar to the holding company set up by Germany after re-unification to dispose of assets owned by the communist state of East Germany.

Mr Rehn confirmed in an interview today that the European Commission has been making preparations for some form of guarantee scheme to underpin additional loans required by Greece.

Sources in Brussels also indicated that next week's ECOFIN meeting will be dominated by the Greek issue, and that planned decisions on changes to the operation of the European Financial Stability Facility and the European Stability Mechanism will be put off until the next meeting in June.