Posts Tagged ‘Jyrki Katainen’
A small country — casts doubt on aid for Greece
France and Germany may effectively run the European Union, but Finland has been demonstrating how even a small country can disrupt their grand designs.
By insisting that it receive collateral from Greece in return for aid, Finland is threatening to upend an agreement that euro zone countries, led by France and Germany, made in July to expand the E.U. bailout fund.
Finland would contribute less than 2 percent of the guarantees provided to the fund, known as the European Financial Stability Facility. But the country’s demands, the subject of intense negotiations in recent days, threaten to derail the fragile consensus that is preventing Greece from defaulting on its debt.
Finland is the most vivid example of the way domestic politics can become Continental problems, threatening the unity of the 17 euro zone members as they face their deepest crisis ever. But Germany, the Netherlands and Austria — all wealthy countries with strong economies — also harbor deep opposition to bailing out Greece, Portugal, Ireland or any other country that may become overwhelmed by debt…
In Finland, Prime Minister Jyrki Katainen faces discontent within his governing coalition as well as pressure from a nationalist opposition group, the True Finns, which rode euro-skepticism to big gains in April parliamentary elections…
Finnish officials say they want to resolve the collateral issue and contribute to the bailout fund. But they are also adamant that the country must receive guarantees.
“We have to listen to the people of Finland,” said a government official, who requested anonymity because of the sensitivity of the issue. “Collateral is an absolute condition for Finland to be involved.”
It is unclear what the collateral might consist of — jokes making the rounds suggest that Greece could pawn the Acropolis or the island of Corfu. And any concessions made to Finland would probably then be demanded by other countries like Austria, where citizens are also grumpy about having to provide tax dollars to support Greece…
They may be jokes to NYTimes writers; but, that was exactly the same response from my favorite banker when we got into a discussion of exactly these fiscal issues — the European Union not being a fiscal union.
Confederacies still haven’t anymore viable economic solutions than they have political solutions. A simple agreement for commerce and currency doesn’t guarantee sound monetary policy for seventeen different economies.
