The Finnish flirt with a euro exit continues. Another anti-euro statement came from a senior Finnish minister: Foreign minister Erkki Tuomioja said that “We have to face openly the possibility of a euro-break up”.
Finland’s Europe minister later distanced the country from that statement, saying that this speculation on the euro breakup doesn’t reflect the government’s position and that Finland is 100% committed to the euro. While this strong comment was later renounced by another minister, Tuomioja did show where the friction would come from.
Tuomioja joins Finland’s finance ministerJutta Urpilainen, that recently threatened to leave the euro-zone “before paying others’ debt”.
In the interview that Tuomioja gave, he further added:
“The ESM loans have priority. That is a red line for us. We are very concerned that the rules of the ESM seem to be changing.”
Another Finnish politician, Miapetra Kumpula-Natri, explained that Finland passed a law this summer that states that the ESM has the same level of priority as the International Monetary Fund (IMF). The Finnish parliament, but this would be very difficult in an environment where the euroskeptic parties are gaining traction.
In Greece’s case, the ECB got seniority and was exempt from the severe haircut that private bondholders suffered. The backlash was that private investors now fear investing in bonds of peripheral countries.
Having learned the lesson, the ECB recently stated that a fresh wave of bond buys will “address the issue of seniority“. There are still no details about how Mario Draghi and his colleagues will address seniority.
Yet it is becoming clear that any less-than-senior status for the ESM bailout fund will put Finland on a collision course with its European peers. Finland, that got collateral deals with Greece and Spain, doesn’t want to risk any of its money via the ESM bailout fund.
Further reading: Inflating Away Debt – Future of Monetary Policy?
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19 Comments
No matter what country we’re talking about — the relatively well-off Germany, Holland, Finland, … even France, or the suffering Italy, Spain, Portugal,… Greece. Hold a referendum in ANY of these countries and the result will be plangent clear: No Euro, NO Schengen, No EU.
It is interesting to note that job boards in Switzerland have been reporting a 50% – 60% rise in registrations of EU-based candidates seeking to expatriate and work in Switzerland, in order to escape the EU. Both Jobs and Qual report large increases in registrations from Germans ! Germany is supposed to doing ‘well.’ Strange that so many Germans should be looking for jobs in Switzerland if Germany is doing so well.
The EU crisis is really a disconnect between the small minority of big-money interests (those who profit from a fluid labor market — i.e. cheapening labor costs) and the rest of the population (the people who actually get up and go to work every day).
Most core EU citizens understand that what is really in their interests is a dismantling of the EU, but the politicians and civil servants who listen mainly to the large EU corporate interests (after all, that’s their retirement, right?) continue to put out propaganda to the effect that it would be ‘too costly’ to return to national currencies.
the entire “euro” concept was originally pushed thru with many manipulations from various governments . it is clear that even then , most “men on the street” were much more in tune with the european situation than their governments. social engineers are responsible for the upcoming disaster.
Not true. Most Europeans are committed to the EU, and those countries in the EURO are committed to it, too. That’s what recent polls (Greece, Spain and Germany) show, as well as elections. Witness the Free Fall of the Free Democrats in Germany, the most EURO sceptic of major German parties. They make their money changing currency. You saw how fast the Finnish Foreign Minister backtracked when pushed. It’s not surprising to me that FOREX would be opposed.
Very interesting point you made there about the FDP in Germany. Also the SPD’s support of Eurobonds strengthens your point.
Not true either…people are afraid at the moment, so stay put. But look at what happened when times where OK and French and Dutch voted against the Lisbon treaty….and a whole host of nations kept clear of the Euro….no this is by the politicians, for the politicians….and we as people have no idea, just like the politicians….only difference is we have to pay, and they don’t.
Living in Norway, I wasn’t privileged enough to have a vote, but if I had, I would have voted against the Lisbon treaty on stylistic grounds. It had no obvious kernel, nor any particularly uplifting sentiment. It was a bureaucratic morass. The original premise was clear and powerful: EU-laws would be enacted by a double majority: a majority of countries representing a majority of people. But the Nationalistic government of Poland shot that down. Nobody remembers what replaced that simple formula. Of course, Europeans are sceptical to politicians’ power grabs. Especially unelected ones. But when I ask them, especially the young ones, most of them don’t want to go back to being a bunch of independent countries with toll inspections at every border and no freedom to work and study in other European countries. The Euro may or may not survive. So far, it’s been pretty good to everybody that didn’t use it to take up loans they couldn’t pay back.
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