Finland, one of the few Eurozone countries with an AAA credit rating, has pledged to oppose Brussels’ plans to allow its new bailout funds, specifically the European Stability Mechanism (ESM), to purchase sovereign bonds on the financial market.

A Finnish government report released last week following the European Summit, considered a significant event, indicated that the country’s Prime Minister, Jyrki Katainen, did not support the proposals that would enable the ESM to buy government bonds in the secondary market. Just the day before, a government spokesperson stated that Finland’s viewpoint was also supported by the Netherlands.

A Finnish government report on last week’s key summit revealed that the Prime Minister opposed granting the ESM the option to buy government bonds in the secondary market. On Monday, a spokesperson confirmed that the Netherlands also backed Finland’s stance. A senior Finnish government official reportedly stated that Finland believes this is not an efficient method for stabilizing the volatile market.

In response, a spokesperson for the Dutch finance ministry noted that the Dutch Prime Minister had announced on June 29th his opposition to bond purchases. He argued that using existing instruments to buy bonds would be expensive and would foster a sense of shared liability among Eurozone countries. This clearly suggests that the Netherlands intends to vote against the plan.

Following the summit’s conclusion, leaders indicated a consensus on deploying both the European Financial Stability Facility (EFSF) and its successor, the ESM, to purchase bonds. However, the specific details of this implementation were not disclosed. Despite the lack of specifics, it was mentioned that the European Central Bank (ECB) had agreed to act as an agent for the EFSF or ESM in conducting market operations to ensure efficient and effective functioning.