Future of rescue deals lies in 'bail-ins': small euro states

Three small eurozone countries -- Finland, Estonia and Ireland -- said Sunday the private sector ought to be involved in future financial rescue packages for member states.

"There must be some private sector involvement," Irish Minister of State for European Affairs Lucinda Creighton said on the sidelines of an informal retreat in Finnish Lapland on the future of Europe.

Finland, which hosted the two-day meeting of European leaders in Saariselkaeae, said the proposed Cyprus rescue package marked a departure from previous packages.

Cyprus and its creditors are trying to nail a deal that will restructure the island's banks and deliver up to six billion euros ($8 billion) from large bank deposits in order to resurrect an agreement for a bailout worth up to 10 billion euros ($13 billion).

"We are moving from a system of bail-out to a system where we decouple the connection between the bank and the sovereign. We are going towards a system of bail-in," Finnish European Affairs Minister Alexander Stubb said.

Under a bail-in, creditors share the burden by forfeiting part of their investment to help rescue a bank.

"I think that is the message that has been sent in this particular rescue package," Stubb said, stressing however that each rescue was "unique".

Estonian President Toomas Hendrik Ilves said meanwhile that public willingness to save banks and countries with taxpayers' money was decreasing in several eurozone countries.

"There is not really much point pushing through something that is going to fail in your parliament," he said.

  • COMMENT: Xenophobia rears its ugly head in Singapore once more 6 hours ago
    COMMENT: Xenophobia rears its ugly head in Singapore once more

    Kirsten Han is a Singaporean blogger, journalist and filmmaker. She is also involved in the We Believe in Second Chances campaign for the abolishment of the death penalty. A social media junkie, she tweets at @kixes. The views expressed are … Continue reading →

  • Driving a $900,000 Porsche 918 Spyder to the future 9 hours ago
    Driving a $900,000 Porsche 918 Spyder to the future

    It’s more than just its inherent speed, or the whooshing noise that fills the cabin like a school choir jamming with James Hetfield. It’s what it represents in an industry full of skeptics. It’s a portal into the future – a time capsule left by some mad scientist born decades too soon. It’s something that shouldn’t exist. And yet it does.

  • 919 reasons to love: Flickr photo of the day 10 hours ago
    919 reasons to love: Flickr photo of the day

    We've brought you the drive video of the $900,000 Porsche 918 Spyder -- an 887-hp hybrid supercar with two electric motors working in harmony with a big 4.6-liter V-8. But how about this? Porsche's hybrid Le Mans racer -- the 919 Hybrid, sent to us by Kevin Leech. Get on board with electrification, folks. Because it's taking over the world.