Thursday, August 25, 2011

Finland threatens to withdraw Greek bailout support

Jyrki Katainen, the Finnish prime minister, has threatened to withdraw support for the Greek bailout in a move that could crush the fragile signs of recovery on global markets.

Mr Katainen said that if Finland's bilateral agreement with Greece over collateral payments was overruled, the Nordic country could back out of the rescue programme.

He told reporters that the private collateral agreement, in which Greece agreed to give Finland €1bn (£875m) in cash in return for its suppport, was "our parliament's decision that we demand it as a condition for us joining in".

Stock markets around the world climbed on Tuesday as positive economic data in China and America convinced traders that recent fears have been overblown.

The euro gained ground against the dollar, oil prices rose and gold retreated from recent highs. The Stoxx Europe 600 rose 0.8pc; in Paris the CAC was up 1.1pc and Germany's DAX advanced 1.1pc. In London the FTSE100 rose 0.7pc to 5129. Even so, markets are still down as much as 15pc in August.

In America stock markets advanced as data showed that China's manufacturing sector was performing better than expected. more