Ligi Stresses EFSF is Not a Gift of Cash (5)

Published: 27.09.2011 13:30

Jürgen Ligi ( Photo: Postimees/Scanpix )

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Finance Minister Jürgen Ligi attempted to clarify the nature of the European stability fund before parliament, saying it does not dole out money to stricken countries, but buys them time.

The bill on taking part in the European Financial Stabillity Facility is in its first reading today.

Estonia would pledge to guarantee 2 billion euros worth of loans granted to countries in difficulty. That's out of a total of 440 billion euros.

"This is money in a guarantee form and countries receive time on the basis of this guarantee," said Ligi on September 27. "We don't go to them directly to give them money, we give them very conditional guarantees so they can finance their deficits and exit debt."

The minister said that talk of expanding the EFSF further is unnecessary, saying that the 440 billion is enough and only a small part is used to cover plans.

Ligi emphasized that Estonia cannot remain a disinterested bystander or ride for free. "This is the most burning concern in the European and world economy and without our consent the solution will not come about," he said, adding that the EFSF will have to be approved quickly to avoid loss of confidence among investors.


Kristopher Rikken

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Comments (5)

  • justsayin

    27.09.2011 13:57

    Markets are pricing in 100% chance of a Greek default on CDOs. There is no good reason to throw money down this rat-hole with EFSF - which will be used to bailout banks that in a free market should fail. The Estonian people should not pay for bailouts to support Jürgen Ligi's banking buddies.

  • Upiter

    28.09.2011 02:52

    EFSF loans should have priority over ordinary debt. Greece will default for sure, but EFSF should be repaid in full. Politically Estonia has done a masterful move though, it placed itself at the core of Europe in the group of stable trustworthy countries. That doesn't go unnoticed.

  • justsayin

    29.09.2011 19:40

    Upiter, EFSF is not a loan - it will not be paid back when the banks fail. "A loan that can't be paid, won't be paid." Estonia's 'masterful move' is being a sucker for the French bankers, who will pay themselves handsomly with the hard earned work of Estonian taxpayers.

  • Upiter

    02.10.2011 18:37

    EFSF loans aren't to banks, but to countries. It has priority over other debts. I am not too worried about repayment. It's true though that the purpose is to save French banks (and not Greece). And I am also mostly opposed to the whole EFSF thing, but criticism should be factually correct.

  • Jüri Estam

    08.10.2011 12:49

    Naturally - assumption of an obligation by a elected representatives "on behalf" of taxpayers, who get footed with the bill, need not be described as a gift, if politicians think they can save face or simply beat around the bush by calling such things solidarity instead. Someone went to a restaurant, ordered six courses, ate heartily, and ran off without paying the bill. So the Estonians (the industrious ants with no national debt) have for some reason decided to help out the grasshopper who cavorted about in the summer. The queen ant declares to the worker ants : this isn't a gift, let's call it "picking up the tab" for the grasshopper instead. Let's call it increasing the liquidity of our good friends. As a reward for their troubles, the Estonians will be "compensated" by getting divested of the very last remaining bits of their national sovereignty. Estonians: relatively industrious, but lousy at seeing through Ponzi schemes and protecting their interests. With apologies to Juliet and the Bard: " 'Tis but thy name that is my enemy; Thou art thyself, though not a Montague. What's Montague? it is nor hand, nor foot, Nor arm, nor face, nor any other part Belonging to a man. O, be some other name! What's in a name? that which we call paying for some other guy's night on the town and helping europoliticians to consolidate power By any other name would still amount to being a "gift".