PM, finance minister, say Czech Republic will not guarantee possible loan to Greece

Prague, July 13 (CTK) - The Czech Republic refuses to guarantee a possible loan to Greece and it will not grant any direct loan to it, Prime Minister Bohuslav Sobotka (Social Democrats, CSSD) and Finance Minister Andrej Babis (ANO) told journalists yesterday.

The EU is contemplating using the old tool called the European Financial Stabilisation Mechanism (EFSM) for a temporary period.

EFSM loans are guaranteed by all EU countries, not only members of the euro zone. The Czech Republic does not pay with the euro.

"Within the mechanism, other EU countries, too, are pushed into the problem," Babis said.

"The Czech Republic refuses any guarantees for the Greek debts. The European Council said in the past that it would not use the mechanism after June 2013," he added.

"Our stance is that we do not want the mechanism to be used. And if it is, only temporarily," Babis said, stressing that the Czech Republic could be outvoted by a qualified majority.

Babis repeated that Greece's departure from the euro zone and a partial write-off of its debts would be the best solution.

"The solution is political, not pragmatic," he added.

Sobotka has repeated that it is better to have an agreement with tough conditions for Greece rather than a totally collapsed state within the EU and NATO.

He said European solidarity had its limits.
"If Greece wants further help, it must implement reform measures," Sobotka said.

After an all-night session, the euro zone members have agreed that Greece may start talks on the third programme of help from the bailout of the euro zone provided tough reform were started.

If the EFSM were approved, the Czech Republic would provide guarantees for 1.13 percent of the possible loan. The EFSM was used to help Ireland and Portugal.