Finns Party chairman Timo Soini claimed in the interpellation debate of 4 Febryary 2015 the following: “It is said that money has not been shovelled from Finland to crisis countries. Yes it has. Anyone can check this from the state budget. It is written down as its own item: The transfer of certain Bank of Finland investment returns to Greece, item 28.01.69. In three years already 100 million euros, and no end to this is in sight.”
Newspaper Helsingin Sanomat also quoted Soini in its article on 4 February 2015.
The claim is wrong.
In the context of the Securities Market Programme started in 2010 the Bank of Finland purchased by the end of the year 2012 Greek state promissory notes to the sum of circa €500 million. According to the agreement of Eurogroup ministers of finance in October 2012, Greece is entitled to the the imputed profit of these promissory notes – provided that Greece fulfills the conditions of the adjustment programme concerning the country’s eceonomic reform.
In 2013 Greece fulfilled these conditions and as per the agreement, Finland paid €40,4 million of the imputed returns. The funds were transferred to Luxemburg, from where it was paid to Greece. The funds have been earmarked for the management of Greece’s debt.
In 2014 Greece did not fulfill the conditions. As part of its distribution of profits the Bank of Finland paid €35 million to the state which tranferred them via the state budget proposal to a barred account in Luxemburg. Thus, the money has not yet been paid to Greece.
In the budget proposal for 2015 a total of €27 million has been budgeted as a transfer to Greece.
Finland pays the imputed returns from the promissory notes to Luxemburg once a year, in July. The so called troika, that is the European Central Bank (ECB), the European commission and the International Monetary Fund (IMF) assess if Greece has fulfilled its obligations as per the agreement. On the basis of this assessment the Eurogroup decides whether payment will be made. If Greece does not fulfill the conditions and the funds are not paid, the funds return to Finland’s state budget.
If Greece carries out the adjustments agreed to in the programme, Finland will, over three years, pay a total of €102,4 million of imputed returns to Greece via Luxemburg.
The agreement is in force until the year 2038. In practice the final year of payment of imputed returns is 2025.
Sources:
Budget proposal 2013– Transfer of certain Bank of Finland investment returns to Greece.
Budget proposal 2014– Transfer of certain Bank of Finland investment returns to Greece.
Budget proposal 2015 – Transfer of certain Bank of Finland investment returns to Greece.
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