Another unexpected twist occurred today in the eurozone saga, as Finland’s finance minister Jutta Urpilainen said the country would rather leave the single currency than pay the debts of other countries.
The Economic Times reports:
Finland would consider leaving the eurozone rather than paying the debts of other countries in the currency bloc, Finnish finance Minister Jutta Urpilainen said in a newspaper interview on Friday.
The finance minister stressed that Finland, one of only a few EU countries to still enjoy a triple-A credit rating, would not agree to an integration model in which countries were collectively responsible for member states’ debts and risks.
Urpilainen said in the interview:
“Finland is committed to being a member of the eurozone, and we think that the euro is useful for Finland,” Urpilainen told financial daily Kauppalehti, adding though that “Finland will not hang itself to the euro at any cost and we are prepared for all scenarios.
Collective responsibility for other countries’ debt, economics and risks; this is not what we should be prepared for.
We are constructive and want to solve the crisis, but not on any terms.”
Finland’s unemployment rate has seen a minimal drop in the last 12 months (from 7.8% to 7.6%), yet this is still a significant improvement on the combined eurozone unemployment rate, which has risen by 1.1% – a record high for the area.
Although it is a relatively small country, Finland’s triple-A rating has empowered its ministers to have one of the loudest voices within eurozone negotiations. Economics blogger Stefan Karlsson observed:
“[In] the most recent quarter, Finland actually surpassed Greece in terms of economic size, despite the fact that Greece has twice as big population. In the first quarter Greece had a GDP of €47.19 billion versus €47.42 billion for Finland.”
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Compassion for other countries has never been forthcoming from Finland, as the Financial Times reported in February that they had “lost faith Greece will ever deliver its end of the bargain” and urging for them to default.
Economics commentator Matt Yglesias tweeted earlier today:
“If Finland had joined NATO in the mid-90s would they have ever hopped on the euro bandwagon? I doubt it.”
While according to Reuters:
Finland’s ratings are underpinned by sound macroeconomic and public finance management, a high value-added economy and positive net international investment position. Finland’s credit profile benefits from exceptionally strong governance and political and social stability, which is also reflected in its impeccable debt service record.
These fundamental credit strengths, especially the strength of public finances and fiscal credibility, have cushioned Finland’s ‘AAA’ status from the turmoil in the eurozone.
A possible Finnish exit from the euro would signal trouble in Brussels, as arrangements for an exit would cause further distraction from plans to stabilise the single currency.