Free Markets, Free People

Finland prepares for Euro-zone breakup

This is not good news by any stretch.  But it is a prudent step.  My guess, however, is it isn’t being well received in Brussels.

The Nordic state is battening down the hatches for a full-blown currency crisis as tensions in the eurozone mount and has said it will not tolerate further bail-out creep or fiscal union by stealth.

“We have to face openly the possibility of a euro-break up,” said Erkki Tuomioja, the country’s veteran foreign minister and a member of the Social Democratic Party, one of six that make up the country’s coalition government.

“It is not something that anybody — even the True Finns [eurosceptic party] — are advocating in Finland, let alone the government. But we have to be prepared,” he told The Daily Telegraph.

“Our officials, like everybody else and like every general staff, have some sort of operational plan for any eventuality.”

We’ve talked about the cascade effect many times before.  What normally causes that effect is some sort of tipping point. So far, it seems, Europe has avoided that tipping point.  One has to wonder if it might be  Finland that tips the scales.  To this point, the subject of the Euro-zone breakup has been pretty much tip-toed around.

Now you have a country that is actively preparing for it and making those preparations public.  Note too what they’re saying – Finland has said it “will not tolerate further bail-out creep or fiscal union by stealth.”

That’s pretty final.

Additionally, if such a plan should be put forward:

Like other member states, Finland has a veto that could be used to block any new bail-out measures. However, unlike some states, its parliament would have to approve each future measure of the eurozone rescue, including a full bail-out of Spain.

And, as you read the article, you’ll see that’s not very likely to happen.

So … hold on.  My guess is the ride in Europe is about to encounter severe turbulence.


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14 Responses to Finland prepares for Euro-zone breakup

  • So, these guys think they are the Finns that wag the dog…er, fish?
    But they are just saying what so many other Europeans are thinking and preparing for.  IF any are not, those are the ones whose people will really suffer.

    • “IF any are not, those are the ones whose people will really suffer.”
      You must mean the population of Erboslavia.

    • Wait a minute.  How is it possible for the Fins to do anything ?  I mean look at the date … the Fins are all on vacation.

  • The ones that will really suffer are the PIIGS.  If they have to return to their own currencies they’ll probably achieve 3rd world economic status in short order.  Combine such economic hardship with a ‘Gavrilo Princip moment’ and you’ve got the makings for a disaster far greater than people think.
    I’m not saying it will happen, just a remote possibility.

    • The entangling alliances and world empire animosities between France, Germany, Great Britain, (Austria Hungary) and Russia are missing.
      There are still separatist movements afoot, but I doubt the Scots are going to be the problem.  The Basques could be a problem for Spain, but I’m not aware of too many others, apart from the eastern European ones that don’t seem like they’d pose a real threat.
      Unless you’re also thinking of the Islamic immigrant influx.

      • I would specifically look for a party that blames the Germans, etc. to create such animosities.

        • True enough, but ‘war’ isn’t likely to result, and the borders will remain the same, even if separatists start working.   That’s not to say there won’t be some major socioeconomic readjustment in places like Greece, Spain and Italy.   After a while though the German monetary menace is going to fade in the light of home grown menacing I think.  After all, the Panzers aren’t going to show up to enforce German interests, whereas the local governments will still want their share of everyone’s local pie for redistributive purposes.
          In France maybe the peace loving followers of the religion of peace will torch various parts of France to show their peace loving nature.  They may want to consult French history before taking that approach for too long, the French sort of have a tendency to REALLY lose their composure when they lose it.

    • Have you seen the bigger PIIGSies
      In their starched white shirts
      You will find the bigger
      Stirring up the dirt
      Always have clean shirts to play around in.

      In their sties with all their backing
      They don’t care what goes on around
      In their eyes there’s something lacking
      What they need’s a damn good whacking.

  • I believe Finland’s public position is more prevalent among nations of the Euro Zone – other nation’s are similarly preparing themselves albeit not so publicly.

    • Let’s not forget the increased “stress tests” for US banks that came around a week or two ago.

  • “Our law passed this summer says the ESM has the same priority as the IMF. There was a clear understanding on this. Any change would require a new law passed by the whole parliament, and this would be very difficult because the risks would be much higher.”So the Finns are concerned with following the actual law concerning which creditor has seniority? What a concept. Such a system would probably encourage more investment for at-risk countries and companies.On the other hand, if President Obama has some free time next year, the UN could pick him up and he’d be able to settle this whole thing without causing additional harshness for the poor countries (Greece, Spain, etc.) that have been kept down because the countries that got the biggest advantages haven’t been willing to share their good fortune with no strings attached.

  • I find it truly amazing that 400 million people are being bound together in an economic fiasco in which NOT ONE DAMN PERSON ever voted for. If you ever hear another Euro whine about democracy or rights or anything at all. Just tell them to shut up because they are nothing but sheep.