Euro

Finland is Ready to Leave the Euro As Frustration With Greece Grows

|

It is an odd political reality that a country roughly the size of New Mexico with a population a little more than Minnesota's and home to cell phone throwing champions is positioning itself to wield dramatic influence over the future of an economy with 333,000,000 people worth almost $12 trillion (2012 estimate).

Finland has veto power over future bailouts, and Finnish politicians have openly said that they are preparing for a eurozone breakup. If the Greek government does not get a handle on its finances quick an interesting and unpredicted economic and political reality could begin to unfold.

Over at truthout Ethan Huff summarizes the dilemma:

Though Finland is relatively strong compared to many other EU member countries, it is weaker than its non-euro Scandinavian neighbors, which include Sweden, Norway, and Denmark. Each of these countries still has its own unique currency, and all of them are growing and thriving much faster than Finland, which is bound to a union currency that is constantly being dragged down by Greece, Spain, and other economically-failing countries.

With its neighbors doing comparatively well it is easy to see why Finland would be reluctant to continue bailing out out countries like Greece. Polling suggests that Finns do want to stay in the euro, but not if it means handing over cash to irresponsible countries like Greece. Indeed, were the bailouts to continue Finnish politicians are open about consdering a euro exit:

"There are no rules on how to leave the euro but it is only a matter of time," said Timo Soini, leader of the True Finn party, to the U.K.'s Telegraph. "Either the south or the north will break away because this currency straitjacket is causing misery for millions and destroying Europe's future. It is a total catastrophe. We are going to run out of money the way we are going. But nobody in Europe wants to be the first to get out of the euro and take all the blame."

Finnish Prime Minister Jyrki Katainen has reportedly expressed opposition to recent proposals that will continue bailing out the struggling Southern European members of the EU at the expense of the flourishing ones. A majority of Finns sampled in a recent poll also said they were tired of Finland having to help bear the financial load for everyone else, as the continued bailouts are greatly depressing the Finnish economy.

If Finland exits the euro it might encourage others to do so, or at least make such an option seem less unorthodox. It would be an interesting and bold precedent to set. I have written before on why it might be worth Germany considering the same move.

Advertisement