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