Estonia envisions «nothing notable» tomorrow

Photo: Erik Prozes / Postimees

Fresh from extraordinary Eurogroup gathering in Brussels, Estonian finance minister Sven Sester (IRL) told journalists at Tallinn Airport that nothing notable would be happening the day after rescue programme expires: Greece will not exit eurozone, Estonia’s and other euro users’ guarantees will not be capitalised, but Greece itself will experience increased financial instability.

The minister said the last European Financial Stability Facility (EFSF) payments to Greece within the programme will be halted. «Because Greece did not keep the promises it once assumed within the programme,» he explained.

Mr Sester said that thereby instability on the nation in monetary and debt crisis will deepen as International Monetary Fund (IMF) is due its debt payment by Greece tomorrow. «As EFSF will not transfer money to Greece, it will surely be more difficult for Greece to pay to IMF,» said the minister. «This would not mean they will definitely miss the payment,» he said, pointing out that thus far Greece had kept its promises. He said that at critical moments Greece had managed to find money from internal resources. «The state has functioned,» observed Mr Sester.

But should Greece now fail to find the money for IMF, Mr Sester says that this would be a new situation and in high likelihood a new eurozone meeting would be called.

According to Mr Sester the guarantee given by Estonia would not be utilised even in the worst-case scenario as the initial repayment of that loan by Greece is only due in 2022.

«Tragicomical,» is what Mr Sester said regarding Greek decision to hold referendum regarding requirements by creditors. He said the referendum will be over conditions which have not been agreed by the parties but were referred to as a possible solution. Pursuant to the agreement that never happened, Athens would have been obliged to reform VAT, pension and state assets privatisation systems.

«The Greeks did not accept these proposals and they were not set before finance ministers to be approved,» explained the finance minister, adding that a new agreement as such never happened.

Mr Sester thinks the idea of the referendum to be weird. «Will this equal an issue of confidence to Greek government if the Greek people approve the reforms? And what would come after that, seeing that these reforms are not a part of the agreement that we currently have?»

According to Mr Sester, the mess in Greece does not endanger financial stability in Europe. «Today, the eurozone is stronger than ever before,» said the minister.