The Euro Bombshell That Finland Just Dropped on Berlin and Madrid
The Finns just dropped a bomb in the lap of the Euro zone leaders and changed the terms of the debate over Europe’s future. In an interview with a leading Helsinki daily, today, Finance Minister, Jutta Urpilainen, said that Finland would be prepared to leave the Euro rather than take responsibility for other countries debts and risks. She has also made clear she will seek collateral from Spain before committing to the bailout. That move is likely to bring just the humiliation Spain sought to avoid.
Finland’s position throws the Euro problem wide open once more. It is perhaps the least expected of bombshells and by dropping it the Finns have told everybody involved, including the markets, that the Euro is not Germany’s to dictate.
When people talk about a solution to the Euro problem, they invariably couch it in terms of what Germany might be prepared to pay for. The reality, as I’ve said here and here, is that solutions to the Euro crisis need a democratic platform.