Finland says may seek guarantees for aid to Spain banks

(HELSINKI) - Finnish Finance Minister Jutta Urpilainen said Saturday discussions continue on details of a bailout plan for Spanish banks and that Helsinki may demand guarantees in exchange for the aid.

"It is clear that the bailout plan will happen," the minister told a press conference.

"The details of the rescue plan are still in discussions," she said after an emergency phone conference with other eurozone finance ministers after the group issued a statement saying it had accepted Spain's plea for help.

Spain formally requested a European lifeline of up to 100 billion euros ($125 billion) Saturday to save its stricken banks and try to avert a broader financial catastrophe.

Urpilainen warned however that "if the funds are taken from the European Financial Stability Facility, Finland will request guarantees."

But if they were taken from the permanent rescue fund, the European Stability Mechanism, Finland will not demand guarantees as it would carry less risks for Finnish taxpayers, said the minister as quoted by public radio YLE.

"Finland will not support Spanish banks directly but through the government," she added.

Earlier, the minister had said that it would be worse to let the banks collapse as this would lead to a "far more serious financial crisis."

The Finnish opposition has sharply criticised the Spanish bank bailout, with the leader of the populist right, Timo Soini, saying that Helsinki "should not give a cent to Spain."