Finland Threatens to Leave Euro-Zone

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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.

EUR/USD continues trading in a very tight range after the big downfall and before the release of the US Non-Farm Payrolls. For more, see the EUR/USD forecast.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

24 Comments

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  3. Eusebio Manuel Vestias Pecurto on

    A Filandia é um pais que eu admiro pela sua corragem dos seus cidadãos quando a moeda do Euro estava a conbater de igual com o Dolar a Filandia não queria sair do Euro nesses anos havia uma galinha que cada vez que ia há capoeira pulha os ovinhos dourados de ouro e o galo dizia há calinha quantos ovos meteste cá fora 11 ovos hoje os estados membros do Eurogrupo tem que estar solidarios

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