Finland demands Spain collateral if EFSF used

Finland will demand collateral from Spain if the country receives aid through temporary rescue mechanism EFSF, Finance Minister Jutta Urpilainen said, according to media reports.

"It is still open whether the loan will be granted through temporary mechanism, when Finland will need collateral as was written in the government programme, or if it will be granted through permanent mechanism," Urpilainen told MTV3 television news.

Spain will make a formal request for aid from its euro zone partners "shortly" and will receive up to 100 billion euros once that request is made, euro zone finance ministers said in a statement on Saturday.

Urpilainen added there was a risk of a Europe wide crisis similar to the financial crisis that followed Lehman Brothers' collapse in 2008.

(Reporting by Terhi Kinnunen)

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