Collateral demands could trigger €18bn Greek default

FINLAND’S demands for collateral on loans to Greece may trigger a default on €18 billion of bonds sold by Europe’s most-indebted country.

The securities, which represent less than 7% of Greece’s €286bn of bonds, are governed by English, not Greek, law and include conditions that insist on equal treatment for all investors.

Giving collateral to Finland as a condition for aid may breach the requirement that fresh debt doesn’t win repayment priority over existing notes.