Friday, 30 November 2012

Don't Forget The Finns!

Whilst anti-austerity campaigners throughout the Mediterranean area of the Euro-zone have been directing their anger and frustrations towards all things German (particularly German Chancellor Angela Merkel and her Finance Minister Wolfgang Schäuble), another country is dictating terms almost as much as the Germans but escaping with minimal minimal criticism - Finland.

During the 1990's, the Finns experienced tough economic times and have since worked hard to ensure that it never happens again. With their own financial crisis still fresh in their minds, the Finnish have managed to be one of the few members of the Euro-zone to attain, and retain a AAA credit rating from the major ratings agencies (Standard & Poors, Moody's, and Fitch). The Finnish voting public like their German counterparts (this is very important as German Parliamentary elections are scheduled for 2013) are beginning to tire of what appears to be the never ending cycle of late night meetings in Brussels for an end result which would inevitably see Finland  poor more of its own money into the various collective bailout funds being established. Compounding this, is the perception that the various reforms which bailout countries need to undertake as a condition of receiving aid are not being implemented. 

As a way to ease discontent at home and to ensure that countries receiving aid could not renege on their promises, Finland has organised for both Greece and Spain to offer them collateral in return for aid. This allows the Government in Helsinki to talk tough on Greece and Spain and how they need to reform whilst displaying to the local electorate that their money is being looked after and not wasted. The Finns were also the proverbial "final hurdle to clear" in the most recent Greek aid package. They arrived in Brussels with once main demand - no more loans which was eventually agreed to. This shows that the Helsinki has now become less willing to assist the Mediterranean countries and may in future actually ask to be exempted from providing funding for future financial facilities and mechanisms. 

The Finnish Prime Minister Jyrki Katainen gave a very good interview with Germany's Der Spiegel which can be read here in English.

1 comment:

  1. What sort of collateral is typically offered in return for this "aid"?