Finland has suggested that Spain and Italy “mortgage” their national heritage buildings, which in the case of Spain, would be the world-famous El Escorial, or El Palacio Real. The equivalent would be mortgaging Buckingham Palace or the Eiffel Tower; national identity in a building or representative architectural jewels in public ownership.
It was the Finnish Prime Minister, Jyrki Katainen, in an interview with Der Spiegel, who suggested this, as a form of guaranteeing Spanish Government bonds on the international market: “…it could help solve the problem if the ailing countries issued covered bonds that are backed by state-owned collateral. We have to do everything in our power so Spain and Italy will continue to receive money on the private capital market.”
He went on to explain, “At the moment, it’s probably not worth it for the ailing countries to sell state assets when prices are so low. Instead, they could use these holdings to secure loans and later sell them on the market.”
We recommend that our readers visit Der Spiegel and read the full interview. Once on their site, just put ‘Ktainen’ and ‘escorial’ into their site, search engine and the interview will immediately come up.
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Finland itself used this method in the 90’s, so it is not suggesting something that it would not do itself. The Finnish PM also recognized that the interest rates that are forced on Spain are not fair, considering the economic and painful overhaul that is being carried out on the national economic structure.
Will Spain go for a bail-out or would it embark on such a course suggested by the Finnish PM?