Denmark to contribute to Greek bailout

The Danish government has expressed its support for having all 28 EU countries – Denmark included – contribute to a Greek bailout.

Denmark to contribute to Greek bailout
Finance Minister Claus Hjort Frederiksen. Photo: Henning Bagger/Scanpix
Danish Finance Minister Claus Hjort Frederiksen has told a parliamentary committee that the government supports the European plan to use money from the European Financial Stabilisation Mechanism (EFSM) to fund financial aid for Greece. 
The EFSM is a fund contributed to by all 28 EU member states, but in 2012 countries agreed that it would no longer be used to bail out struggling countries in the eurozone, with an alternative fund called the European Stability Mechanism (ESM) created instead, drawing only on the resources of countries using the single currency.
But Frederiksen said that some 1.05 billion kroner of Danish EFSM funds would go toward giving Greece a short-term loan of seven billion euro. The loan is expected to be paid back to EFSM within three months, according to Frederiksen's letter. The eurozone’s total aid package to Greece is expected to be between 82 and 86 billion euros over the next three years.
“The [Danish, ed.] government has an understanding of the exceptional and difficult situation for Greece as well as the eurozone countries’ need for sufficiently fast initiatives,” Frederiksen wrote in a letter to the European Affairs Committee. The letter was published by TV2 News
In the letter, Frederiksen states that Denmark will push for guarantees on the loan and the condition that the nation not be held liable if Greece fails to repay.  
Frederiksen had previously told his European counterparts that Denmark was against using the EFSM to help Greece. His standpoint was backed by fellow non-eurozone countries Sweden and the UK. But in his letter, Frederiksen said that Europe’s finance ministers “couldn’t find a solution that only involves the eurozone countries and that can be activated quickly enough”. 

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Danish left hails Syriza ‘Red Spring’

Denmark’s far-left Red-Green Alliance has congratulated Greece for voting in the populist leftwing Syriza party, calling the party’s victory “an important day for Greece and also for the rest of Europe.”

Danish left hails Syriza 'Red Spring'
Jubilation in Greece following Syriza's victory captured by the Red-Green Alliance's Pernille Skipper. Photo: Pernille Skipper
Pernille Skipper, a policy spokesman for the party, who was in Athens to support Syriza ahead of Sunday’s election, called on Denmark’s government to work with the new Greek government to help it renegotiate its crippling debt. 
“The Greek people have clearly rejected the EU's neoliberal economic experiments,” she said in a statement “The Greeks have said no, that ordinary people should not have to foot the bill for the financial crisis. It should inspire people in other European countries.” 
Syriza won Greece's general election on Sunday with 36.4 percent of the vote, after its leader Alexis Tsipras vowed to end cuts in public spending and bring an end to what he called "five years of humiliation and pain".
With 36.4 percent of the vote, Syriza aims to govern in coalition with a smaller right-wing party.
Denmark’s two leading parties on Monday dismissed proposals to renegotiate Greece’s debt. 
Morten Bødskov, the EU spokesman for the ruling Social Democrats, said that Tsipras’s proposals were not realistic. 
“It’s an illusion to think that you can just sweep away all the debt, and it’s an illusion to believe that anyone’s gong to accept that there need be no reforms to the Greek system,” he said. “But of course, you won’t hear Tsipras saying that.” 
Jakob Ellemann-Jensen, the EU spokesman for the centre-right Venstre Party said that it would be “completely unreasonable and crazy” for Greece’s new government to believe that Germany and other European countries would agree to write off Greece’s debt. 
Syriza’s victory was welcomed across the European left, with Jonas Sjöstedt, the leader of Sweden’s Left Party telling The Local he was “delighted” with the result, which he hoped marked the start of a ’Red Spring' across Europe. 
Katja Kipping, the leader of Germany’s Left party, told the country's Bild newspaper that her party was  “hoping for a red spring in Europe”.
Populist left-wing parties are growing in force across Europe, with a new Spanish anti-austerity party Podemos drawing strong support. 
Denmark’s Red Green Alliance, led by the charismatic Johanne Schmidt-Nielsen, had the support of some 8.5 percent of voters in a January 20th poll by Norstat, up from 6.2 percent of the vote in Denmark’s 2011 election.