Information on Finland's commitments and the EU financial stabilisation facilities

Finland's contribution to the loans for Iceland, Latvia and Greece and to the guarantees for the financial support for Ireland

Finland's contribution to the loan packages and loans disbursed, EUR million (as on 15 July 2011)

In 2009 Finland loaned Iceland EUR 54 million. In 2010 loans totalling EUR 498 million were granted to Iceland and Greece. This year (by 15 july) EUR 496,5 million has been disbursed to Greece.

Iceland

The prime ministers of the Nordic countries set up a Nordic working group in October 2008 to address the question of support measures for Iceland. On 19 November 2008 the Executive Board of the International Monetary Fund (IMF) approved a two-year financial support package (stand-by arrangement) for Iceland. Under the IMF-supported programme, the Nordic countries, i.e. Norway, Sweden, Finland and Denmark, together decided to complement the $2.1 billion funds granted by the IMF by another $2.5 million loan (EUR 1 775 million).   

The disbursement of the loans is determined on the basis of the IMF Executive Board's approval of the programme's four interim assessments, on condition that Iceland has put into effect the stabilisation and development programme, as it has pledged to do. The loan between Iceland and the Nordic countries was contracted on 1 July 2009. The interest on the loan is a 3-month Euribor 2.75 percentage points.    

Finland's contribution towards the Nordic loan to Iceland is EUR 320 million. The disbursement of the Finnish contribution is also contingent on IMF approval of Iceland's progress in the economic programme as planned. The repayment of the loan to Iceland takes place in quarters so that the first debt repayment is due 5 years from the drawing of the first loan and the last one 7 years after the first repayment instalment.

Iceland drew the first loan tranche in December 2009 and the second one in June 2010. Debt repayment will therefore start in December 2014 and terminate in December 2021. Finland's contribution towards the December tranche was EUR 54 million and EUR 106 for the June tranche. Hence Finland has paid half, i.e. EUR 160 million of the agreed total of EUR 320 million loan. At present there are no planned dates for any new loan tranches. 

 Latvia

In December 2008 it was decided by the IMF and the European Commission that a stabilisation package would be granted to Latvia involving finances totalling EUR 7.5 billion.

Of the total loan, the contribution of the Nordic countries and Estonia is around EUR 1.9 billion, of which Finland's contribution is EUR 324 million. A loan agreement between Latvia and the Nordic countries was signed on 21 September 2010. The creditor countries apply the same debt terms and conditions as those applicable to the IMF and Commission resources. The interest on the debt is a 3-month Euribor 2.75 percentage points. To date none of Finland's contribution has been drawn. The government of Latvia says that it might not necessarily need the Nordic loans once the economy in Latvia becomes stabilised. 

Greece

Finland's loan to Greece is part of a loan package of EUR 110 billion pledged by the euro area economies and the IMF to Greece in May 2010. The euro area countries account for EUR 80 billion, and Finland's imputed contribution as computed using the ECB's capital key is about EUR 1.48 billion. However, in May the government proposed to Parliament to raise another EUR 1.6 billion as a contingency in case some of the euro area economies do not participate in the loan programme for Greece. The loan term is 5 years maximum and the interest on it is a 3-month Euribor 3 percentage points. Each tranche includes a 0.5% management fee, which is subtracted from the loan tranche.

Finland was not included in the drawing of the first debt loan tranche but took part in the second one in September 2010, when the first instalment was also paid, totalling EUR 392 million.

Under this loan programme, Greece may draw funds over a period of three years from the signing of the agreement. The first repayment instalment is due 3 years from the first tranche. A decision was taken on the third loan tranche in December 2010 and it was granted on condition that Greece makes progress in its consolidation programme as agreed. The tranche amounts to EUR 6.5 billion, of which around EUR 123 million is Finland's contribution as computed using the ECB's capital key. The loan was disbursed on 19 January 2011. The fourth loan tranche was paid on 16 March 2011, and amounted to EUR 272,6 million (Finland's contribution). The fifth payment was made on 15 July 2011, to the amount of EUR 100,9 million.

Ireland

The estimated funding required by Ireland for 2011-2013 is EUR 85 billion. Ireland will cover EUR 17.5 billion of the total, mainly by releasing resources from pension funds. A debt of altogether EUR 67.5 billion in will be granted to Ireland for 2011-2013. Of the total, the European Financial Stabilisation Mechanism (EFSM) will contribute EUR 22.5 billion, the European Financial Stability Facility (EFSF) EUR 17.7 billion and the International Monetary Fund (IMF) EUR 22.5 billion. A separate bilateral loan between Ireland and the United Kingdom amounts to EUR 3.8 billion, and one with Sweden EUR 0.6 billion and with Denmark EUR 0.4 billion. The loan term is set at 7½ years and the interest is a fixed 6.05 per cent. To date, Ireland has not drawn the EFSF loan, so no exact information on its maturity or interest is available yet.  

Finland's government guarantee amounts to 1.88 per cent of the EFSF loan funding for Ireland, which amounts to a principal of approximately EUR 507.5 million and related interest payments and other expenses. With a number of provisos and in the light of current information including a 20% excessive guarantee, Finland's total guarantee sum is estimated at EUR 740.7 million.

Language versions

• Suomen osuudet Islannin, Latvian ja Kreikan lainoista sekä takausvastuusta Irlannin tukilainalle
  16.08.2011
• Information om Finlands utfästelser och EU:s stabiliseringsarrangemang
  16.08.2011

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