Today Jyrki Katainen was keen to quash rumours that his government would drop the euro. The Finnish Prime Minister firmly denied that his country would abandon the euro in the event of the debt crisis escalating further. ‘We will not and do not consider exiting the euro’ were the words uttered by the premier during an interview in Helsinki.
Economists had predicted that Finland might quit the euro as a form of protest. They based this assumption on the fact that Finland’s previous demands, that bailouts should only be granted in conjunction with austerity, burden sharing, and other restrictive terms, had not been adhered to. It appears the economists were wrong.
According to Katainen, not only does Finland have no plans to abandon the euro, it wants to have a key role in helping the euro-zone rebuild: ‘We want to be at the heart of European development. A stronger euro, a better euro is the only, and reasonable, thing for Finland.’
Despite Finland demanding that collateral be in place prior to a second bailout for Greece last year, it seems that the Spanish bank bailout has the support of the Finnish government. The northernmost member of the euro zone, whose ‘anti-bailout’ party became the third largest during the 2011 elections, sanctioned the action today.
In order for Finland to guarantee a part of the 100 billion euro rescue fund the parliamentary summer break was interrupted for the first time in half a century.
Spain securing the backing of Finland, one of only four remaining AAA rated nations in the euro-zone, is something that won’t go down well with the Finnish population. As Katainen stated; ‘It was a necessary decision to take, even though it’s very hard. It’s unpopular, but we have to take responsible moves and steps because the economic situation is so challenging.’
Katainen also expressed his feelings on integrating the members of the currency bloc.
‘We believe that we need to a certain extent more integration […] It doesn’t mean mutualizing liabilities, but it means we have to have better rules.’ He went on to assert that ‘Finland isn’t benefiting from the crisis [and as] an export-driven economy […] once the European market isn’t doing well, we suffer a lot.’
Unfortunately it seems that ‘A stronger euro, a better euro’ is still a long way off.
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