Finland's parliament clears way for European bail-out for troubled Portugal

Finland's parliament yesterday approved a European bail-out for Portugal, clearing the way for finance ministers of the wider 17-nation eurozone to approve the plan next week.

In a 15-5 vote with five abstentions, the parliamentary grand committee backed the plan, authorising finance minister Jyrki Katainen to approve the aid package at Monday's meeting of finance ministers in Brussels.

The ministers there will discuss the finer details of Portugal's bail-out plan, with each country offering proposals and certain conditions, before rubber-stamping the deal. Because Finland is part of the eurozone, its approval is required for any rescue measures for cash-strapped eurozone states.

That approval was threatened by Finnish politics after a surge in support for the nationalist, anti-bail-out True Finns party in the country's 17 April election. On Thursday, the True Finns pulled out of government formation talks saying the party could not be part of a government that backs EU bail-outs. Finland's two largest parties, meanwhile, had agreed on their position on the bail-out, making the outcome of yesterday's vote predictable. The country set up a number of preconditions for the plan, however. It wants Portugal to keep private investors from pulling their funds out of the country and for it to sell state assets to ensure the EU loans can be repaid.

While Finland's blessing for the ?€78 billion (68bn) bail-out by the EU and IMF eases Portugal's immediate concerns, the Portuguese are braced for at least two years of recession.