Brussels blog

Finland's finance minister Jutta Urpilainen, left, and prime minister Jyrki Katainen

Senior European officials had hoped to finally bang out a deal today on Finland’s demand for collateral from Athens in order to participate in Greece’s new €109bn bail-out. But fellow Brussels Blogger Josh Chaffin reports in from Wroclaw, Poland, that the Finns don’t seem to be in a mood for compromise.

“I think we are going to debate about it, but unfortunately I don’t see that we can find a solution tonight,” Jutta Urpilainen, the Finnish finance minister, said heading into the meeting of her eurozone counterparts in Wroclaw. “We continue to negotiate. I’m optimistic that we can find a solution that everybody can accept.”

European Union officials have grown increasingly exasperated with the Finns, who made the demand for collateral part of the new governing coalition agreement reached after April’s indecisive national elections.

Helsinki further angered Brussels by cutting a side deal with Greece that would have had Athens deposit about €500m in cash in a Finnish escrow account, an agreement that was scuppered by other eurozone countries angry at Finland getting special treatment.

Just how taken aback was Brussels by the deal? Helsingin Sonomat, Finland’s leading newspaper, recently ran a telling story that Olli Rehn – who is both Finland’s representative at the European Commission as well as the EU’s economic chief – was not even told about the side deal before Urpilainen announced it.

“Previously in EU matters of this level, Finnish ministers have been in contact with the commissioner well in advance,” the paper quoted the normally staid Rehn as saying.

The dispute highlights the intensifying political fissures in Finnish political life that are beginning to infect several eurozone countries. Urpilainen is the head of Finland’s Social Democrats, once the country’s most pro-EU party which now leans increasingly eurosceptic because of growing anti-EU sentiment among Finland’s working class.

Rehn’s political home, the Centre party, has been split in half with Rehn’s pro-EU faction, led by recently ousted prime minister Mari Kiviniemi, losing support from the party’s traditional rural base – which has joined the anit-EU bandwagon.

Jyrki Katainen, the new Finnish prime minister, heads the centre-right National Coalition party which is now the country’s only unreservedly pro-EU major party. Makes for a difficult six-party coalition to keep in line.