Greece: Avoiding the Black Maria in Finnish politics

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By Olli Kivinen
     
      Political struggles rarely pit pure good and pure evil against each other. However, sometimes one side wants to take on such a tough role that it turns against itself.
      This is what happened to Finland’s Social Democrats, when a record-bad election result, lack of experience, and the burgeoning rise of the True Finns sent the party leadership into a panic.
      The [Jutta] Urpilainen - [Eero] Heinäluoma axis latched with unyielding defiance onto the demand that Finland should get collateral from Greece and made this a condition for their agreeing to join the government.
      The idea of collateral is not a new one.
      It popped out already when Jyrki Katainen (Nat. Coalition Party) served as Minister of Finance, when there was discussion of extending credit to Ireland. The National Coalition Party quickly distanced itself from the idea when it was examined more closely.
     
There are a number of dimensions to the issue. A bilateral agreement with Greece showed a deep lack of understanding about the basic ideas of European integration. Our country believed that it was living in outer space - apart from the realities of domestic politics in all other countries.
      The idea that Greece would pay Finland collateral in cash that it borrows from the International Monetary Fund, or from Germany, for instance, is absurd, and bestows upon us the image of somewhat simple backwoodsmen.
      Finland clearly made the handling of a serious matter more difficult. The hasty escape was both stupid and unnecessary.
      What needs to be understood here is that the core of the problem is specifically the bilateral agreement between Finland and Greece, not putting pressure on Greece in general, even though Finnish politicians try to confuse the issue with their doublespeak.
     
What is very awkward in this card game is that Finland is being offered the Black Maria, the card nobody wants left in their hand*.
      At present a plurality of predictions are for some kind of collapse of Greece.
      Then nasty foreigners will remind everyone that Finland was shuffling the deck at a critical moment and disrupted the negotiations on the big issues that lie ahead: the future of the euro and establishing efficiency for the common economic policy.
      Here in Finland people kept harping on about collateral at a time when political leaders should have concentrated on putting forward alternatives and debunking the wildest claims made by the populists.
      This showed a good amount of the much-criticised upper level sandbox elitism.
     
Another possible outcome might be that a “compromise” is drafted in the best EU tradition; one which everyone can show off as a victory at home, but which lacks any real substance.
      In this Finland is at the mercy of the other euro countries. Hopefully they will bother to find arrangements that will wash Finland’s face just a little bit.
      The third option is that the EU, which is tenacious in finding compromises, will develop some kind of working arrangement that would work even in a difficult situation. The Commission is currently working on these.
      Minister of Finance Jutta Urpilainen (SDP) has said repeatedly in very plain language that helping Greece without collateral would be “irresponsible”.
      Especially if the first option - that the euro falls into really deep trouble - becomes reality, there will be plenty of rehashing to be done within the SDP on what is “irresponsible” in a situation when mass unemployment threatens the future of the party’s own supporters, for instance.
      The spectre of a recession is real, and solo acts are not the way to fight it.
     
As the big issues were being shuffled around, the principles of international politics which served this small country well were dumped in the trash:
      Never paint yourself into a corner with statements that are too absolute.
      Finland is a sober builder, not a boat-rocking troublemaker.
      Finnish politics is reliable and predictable, and our country sees to it that all other possible players will know and understand our projects.
      Finland is not megalomaniacal; it understands that a small country best promotes its own interests through mediation, not by issuing ultimatums.
      Domestic policy issues must not destroy the position of trust that Finland enjoys in the EU and elsewhere.
     
As usual, trying to put a positive spin on the matter only made things worse.
      Ministers used evasive language when they said that “technically”, and “legally” Finland and Greece were entitled to agree bilaterally on collateral.
      Of course that is true.
      Finland is a sovereign state which can, technically and legally, declare war on Russia, China, and the United States, even simultaneously, but whether or not this would be a sensible move is a completely different matter.
      The SDP’s aimless confusion seemed especially strange, as it smacks of a farewell gift to party comrade Tarja Halonen, who will soon start her final half year as President.
      She has put a great emphasis on the role of the President in handling foreign policy.
     
As the new government was being formed, issues of EU policy somehow slipped into the Ministry of Finance.
      The abovementioned principles show that EU affairs need to be brought back rapidly to the Office of the Prime Minister, where they belong.
      Prime Minister Jyrki Katainen (Nat. Coalition Party), who is struggling to keep his government intact, will now have to pick the shards of sensible international policy from the wastebasket back onto the table, as he did in his speech on Thursday.
     
Another reason why the whole sorry collateral affair has been sidetracked is that the future of the euro has been handled as an economic matter and nothing else.
      The situation is also made more confusing by economic experts who drive the citizenry, including politicians and journalists, to the point of desperation with their contradictory advice.
      Fortunately the most honest among them will admit on the side that they really do not have a clue what will happen in all of this.
      One key influential figure in the EU put it very concisely: there are 600 economic researchers in the EU.
      When you ask them something, you get 1,200 opinions, and Olli Rehn has to choose the most sensible-sounding one from among them.
      The struggle over the euro is thoroughly political, and the euro isn’t going anywhere.
      So much political capital has been put into it that giving it up cannot be an option.
      The reason is simple: without the euro, the EU and its member-states are no more than feather boats on the waves of the new distribution of today’s world.
     
     
Helsingin Sanomat / First published in print 13.9.2011
     
     
*Translator's Note: The allusion is to the game of Hearts, in which one object is not to end up with the Queen of Spades ("Black Maria") in the pile of tricks won.
     


Previously in HS International Edition:
  FM Tuomioja says Finland deserves gratitude for actions in euro crisis (5.9.2011)
  Finland could get Greek bank shares as collateral (31.8.2011)
  Germany “taken by surprise” by collateral deal (30.8.2011)

See also:
  Katainen making no guesses about possible Greek debt restructuring (13.9.2011)
  Finland and Greece agree on bailout terms (17.8.2011)

OLLI KIVINEN / Helsingin Sanomat
okivinen@kolumbus.fi