Presidential hopefuls weigh in on euro crisis
Niinistö: Eurozone being nudged in direction of federation
Sauli Niinistö, the likely presidential candidate of the National Coalition Party, is not enthusiastic about the government’s insistence on collateral from Greece in exchange for Finnish participation in the guaranteeing Greece’s loans.
“The collateral debate is moving somewhere in the middle ground between theory and practice. Let’s see how things go”, Niinistö says.
He nevertheless feels that it is good that Finland is trying to limit its liability. “Finland has the moral right to raise debate on whether or not we must bear the same responsibility as the euro countries whose banks are more closely linked with the crisis countries.”
Niinistö, who has served as the vice chairman of the board of Directors of the European Investment Bank, does not agree with those who would label him ant- euro. “I am not euro-critical, I’m euro subsidy-critical. I take a critical view of bailout policy so that the euro might live”, he explains.
Niinistö says that instead of concentrating on collateral and other minor details, the focus in Finland should be on the “big picture”, in which moves are being made to nudge the eurozone toward more common responsibility, and into a federation. Niinistö sees many signs of this.
One sign of creeping development toward a federation, in Niinistö’s view, is that the European Central Bank has spent tens of billions of euros buying bonds of countries in crisis.
“The buying activities of the ECB is at the expense of all euro countries, and the creation such a common responsibility is a big matter”, Niinistö says.
The ECB is an independent institution which decided independently to buy the bonds. “It is problematic that such a big decision has been made with neither the involvement, nor the full awareness of the democratically elected leaders of the euro countries in the decision.”
Another cause for concern on Niinistö’s part are the Eurobonds. To ease the debt crisis, there have been proposals for joint bonds of the euro countries, which would allow even the weakest to get reasonably-priced loans.
Niinistö points out what he sees as a major inequality inherent to the Eurobonds: as he describes it, the debt is taken collectively, but the money is spent by the individual countries. He sees no reason why Finland should be involved in the Eurobonds, although he fears that things are going in that direction.
There was no proposal for Eurobonds at Tuesday’s meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel, but the two did call for closer economic policy in the eurozone; Niinistö points out that this is a practical prerequisite of closer economic policy.
The likely Presidential candidate of the Social Democratic Party, Paavo Lipponen, is not as worried about the intentions of Sarkozy and Merkel. Lipponen says that Germany and France were right to work for closer cooperation in the eurozone and to promote better economic discipline.
Lipponen feels that it is deceptive to speak about development toward a federation, as the whole issue is a matter between governments.
He added that Finland needs to work to stabilise the eurozone through its own actions.
“Hopefully, in questions concerning the euro, Finland will not be part of the problem, but rather part of the solution”, Lipponen said.
He did not want to comment on the fresh agreement between Finland and Greece. However, he praised the activities of both Prime Minister Jyrki Katainen (Nat. Coalition Party) and Minister of Finance Jutta Urpilainen (SDP) in the matter.
Green presidential candidate Pekka Haavisto feels that deeper unification in the eurozone makes sense, and that a good step in this direction would be to play according to the same rules.
“This means that we should follow what has been agreed upon, and that implement the savings programmes that have been agreed”, Haavisto said.
Centre Party presidential hopeful Paavo Väyrynen has some completely different notions. On Wednesday he wrote in his blog that Finland and Estonia should immediately withdraw from the euro and introduce a common currency, the crown.”
“A joint crown zone would open the road to close Nordic cooperation with which we could survive both the European and the global upheavals”, Väyrynen writes.
Previously in HS International Edition:
Finland and Greece agree on bailout terms (17.8.2011)
Poll puts Niinistö well ahead in presidential race (4.8.2011)
Presidential race: Lipponen candidacy takes aim at populism (12.8.2011)
Väyrynen says his own presidential prospects are enhanced by Lipponen candidacy (12.8.2011)
Green MP Pekka Haavisto to run for President (9.6.2011)