Finland stood out for asking for collateral from Greece and later Spain. Now, Finland’s finance minister Jutta Urpilainen heightened the tone regarding the situation in the euro-zone and hinted that Finland would rather leave the zone than pay others’ debts.
In an interview with the Finnish Kauppalehti daily, Urpilainen said that Finland will not crash with the euro-zone, and is ready for any scenario.
Update: the Finnish finance ministry now denies that it threatened to leave the euro-zone. They say that Finland is committed to the euro-zone, considers it beneficial and just doesn’t support eurobonds.
Despite this denial, it seems that she did say that Finland would leave the zone before paying others’ debt.
Finland is one of the 4 euro-zone countries that still has a perfect AAA credit rating. Finland doesn’t want a union based on mutual debt and risks of other countries.
Finland’s demand of collateral is one of the 8 holes in the Spanish bailout plan.
In a separate interview with Helsingin Sanomat, she said that Finland is taking a constructive and “hard line” – Finland wants to solve the debt crisis, but not without conditions.
Finland and the Netherlands opposed direct bond buying by the ESM bailout fund, but apparently they don’t have enough voting rights to stop it – they don’t have 15%.
According to the ESM rules, a majority of 85% of euro-zone members voting rights are necessary in a case of emergency. Spain already said that individual countries cannot block direct bond buying in the secondary markets.
IMD economist Arturo Bris said that a Finnish exit of the euro-zone is certainly an option. One of the reasons is the higher volume of trade with its neighbor Russia. Also trade with its fellow Scandinavian countries which are not in the euro-zone, has increased. This lowers Finland’s interest to remain in the zone.
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