Finland: Exhibiting strain of northern independence
Depending on your perspective, Finland may conjure recollections anywhere from Sibelius’ exquisitely lyrical Karelia Suite to the speedy monosyllables of Formula One champion Kimi Raikkonen...via multiple thoughts in between. Nevertheless, it doesn’t link easily in the mind to the Mediterranean. Yet the new Finnish government may be about to make an indelible impact on the eurozone’s profligate south.
Let’s back up for a moment: the Finnish General Election campaign concluded at the weekend with a popular vote amongst the population of 5.5 million. Western media saw the Finnish vote as a very insignificant sideshow to the 2016 Clinton coronation (which probably won’t be...but that’s another story) or the current British borefest of economic illiteracy.
Yet the Finnish election of 2015 may have more ramifications for Europe than who governs either the UK or US in the near future. That’s not because the Finnish economy is rebounding fast - rather the backdrop to the vote was one with GDP still 5 percent below the previous peak.
Nevertheless, the Finns aren’t profligate. Their debt to GDP is a modest 57 percent, vastly below even Germany (80 percent) or the UK (90 percent), and a fraction below the Mediterranean spendthrifts. Finnish unemployment is an uncomfortable 9 percent - true that is less than say France, but in Helsinki government retains pretensions to economic credibility which Paris has clearly long since abandoned.
Even the last Finnish government, despite apparent pro-EU credentials, was skeptical about the retention of Greece in the eurozone. When the Greeks passed around the begging bowl, the Finns, uniquely, demanded €1 billion in collateral from Athens in order to support the 2011 bailout. If anything, since then, Finnish opinions about the Mediterranean have become even less sympathetic. Reports continue to suggest it was a hardening of Finnish opinion which resulted in Syriza being forced to accept a three-month debt reprieve in late February. Ever since, Athens has been in a desperate struggle to meet its obligations and the noose continues to tighten, as the Greek nation struggles to accept that it is willfully strangling itself within the single-currency straitjacket.
Against this background, last Sunday’s Finnish general election may have appeared a largely local political event, but it is in fact another step towards the likely breakdown, or at least shrinkage, of the eurozone.
The winner of the election, ousting pro-NATO, pro-EU PM Alexander Stubb, was Juha Sipila, a millionaire executive in, perhaps appropriately for the nation of Nokia, the telecoms industry. The new PM-elect is expressly anti NATO membership as are three of the leading four parties in the election who together garnered more than 55 percent of the popular vote. That suggests recent NATO sabre rattling against folks to the east has not rung a chord with Finnish voters…
However it is in the euro arena that matters perhaps look most fascinating. A strong second in the poll was ‘The Finns’ party, which dropped the ‘True’ epithet from its name this time around, but retains a very strong Euroskeptic tone. ‘The Finns’ are highly likely to form a key component of the government and their role as runner up party means they have the right to nominate the finance minister.
While ‘the Finns’ toned down the rhetoric of previous campaigns this time around, the simple truth is that even a pro-EU PM was previously twisting the at every turn on the Greek economic meltdown. With Finland taking a clear turn towards euroskepticism, the euro endgame has taken an interesting new twist. Well, unless you are Greek, with citizens harboring a curiously stubborn desire to retain the euro - despite that slight blurry attitude towards debt. Thus, events at the weekend mean resolution of the Greek’s stay-or-leave euro dilemma took a step towards eventual resolution.
If you want to save time, you can safely ignore the breathless discussions as negotiations drag on through another cycle of emotive Greek drama in Riga this week. The Finnish elections have merely confirmed the fate of Athens’ futile endeavors to remain a fully ‘unpaid up’ debtor member of the flawed eurozone.
Prepare for a new drachma, from Helsinki with love.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.