Eideard

France and Germany may effectively run the European Union, but Finland has been demonstrating how even a small country can disrupt their grand designs.

By insisting that it receive collateral from Greece in return for aid, Finland is threatening to upend an agreement that euro zone countries, led by France and Germany, made in July to expand the E.U. bailout fund.

Finland would contribute less than 2 percent of the guarantees provided to the fund, known as the European Financial Stability Facility. But the country’s demands, the subject of intense negotiations in recent days, threaten to derail the fragile consensus that is preventing Greece from defaulting on its debt.

Finland is the most vivid example of the way domestic politics can become Continental problems, threatening the unity of the 17 euro zone members as they face their deepest crisis ever. But Germany, the Netherlands and Austria — all wealthy countries with strong economies — also harbor deep opposition to bailing out Greece, Portugal, Ireland or any other country that may become overwhelmed by debt…

In Finland, Prime Minister Jyrki Katainen faces discontent within his governing coalition as well as pressure from a nationalist opposition group, the True Finns, which rode euro-skepticism to big gains in April parliamentary elections…

Finnish officials say they want to resolve the collateral issue and contribute to the bailout fund. But they are also adamant that the country must receive guarantees.

“We have to listen to the people of Finland,” said a government official, who requested anonymity because of the sensitivity of the issue. “Collateral is an absolute condition for Finland to be involved.”

It is unclear what the collateral might consist of — jokes making the rounds suggest that Greece could pawn the Acropolis or the island of Corfu. And any concessions made to Finland would probably then be demanded by other countries like Austria, where citizens are also grumpy about having to provide tax dollars to support Greece…

They may be jokes to NYTimes writers; but, that was exactly the same response from my favorite banker when we got into a discussion of exactly these fiscal issues — the European Union not being a fiscal union.

Confederacies still haven’t anymore viable economic solutions than they have political solutions. A simple agreement for commerce and currency doesn’t guarantee sound monetary policy for seventeen different economies.

Click on the photo for video

It is a bank, but not as you know it.

Yes, it has electronic security doors. Yes, there are cameras watching every angle. And, Yes, barbed wire surrounds the perimeter.

But in this bank, you do not see any cash or diamonds. Instead, the deposits here have a different kind of value. So valuable that, just like other banks, it has been robbed. Three times.

And what is in this vault? Parmesan cheese. Lots and lots of it – 300,000 blocks or “wheels” of Parmigiano-Reggiano cheese, to be precise, stored on giant shelves.

Parmigianino Reggiano is the prince of Parmesans. It is why all the cheese here is worth about $200 million…

The bank is sitting on this pile of Parmesan for a purpose – it is running a cash-for-cheese loan scheme…

The bank charges interest at about 3% and a fee for looking after the Parmesan in its air-conditioned, humidified vault.

In return, the cheese maker gets his hands on bank funds to see him through the long period it takes for the cheese to age and be ready for market, but a time during which he still has to pay wages and other bills.

If the cheese producer defaults on the loan, the bank has the cheese to sell.

It truly is a glorious cheese. Though I admit that for most pasta dishes I prefer Pecorino Romano.

Now, I’m going to make myself hungry posting this.

Ready to give your soul for a loan in these difficult economic times? In Latvia, where the crisis has raged more than in the rest of the European Union, you can.

Such a deal is being offered by the Kontora loan company, whose public face is Viktor Mirosiichenko.

Clients have to sign a contract, with the words “Agreement” in bold letters at the top. The client agrees to the collateral, “that is, my immortal soul.”

Mirosiichenko said his company would not employ debt collectors to get its money back if people refused to repay, and promised no physical violence. Signatories only have to give their first name and do not show any documents.

“If they don’t give it back, what can you do? They won’t have a soul, that’s all,” he told Reuters in a basement office, with one desk, a computer and three chairs.

Uh, OK. Maybe that works – if you believe? I think it’s useless for all the right reasons: non-definable collateral, worthless on the open market.