Finland, Holland to block use of rescue funds for bond purchases

Date: Monday 02 Jul 2012

Finland and Holland intend on blocking the use of European rescue funds for the purchase of sovereign debt in the secondary market, Reuters reports after having access to a report submitted by a committee of the Finnish parliament in Helsinki.

The use of these funds for sovereign debt purchases was announced at last week's European summit. Spain and Italy would be the main beneficiaries of such an agreement.

The details of the potential purchases have not been revealed yet. They may be carried out by any of the two rescue funds set up by the European Union, the temporary EFSF (European Financial Stability Facility) or the permanent ESM (European Stability Mechanism), which is expected to replace the former and become effective once approved by all members.

The German parliament approved the fund on Friday.

MG

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