FINLAND went to the polls this weekend to tell the European Union they’re not happy about Eurozone bailouts.
This noble land of Thor, reindeer and saunas* doesn’t make the financial news very often. On the one hand, its stable economy keeps it out of articles focusing on troubled countries like Greece and Portugal. On the other hand, its modest wealth keeps it out of articles focusing on richer countries like France, Germany and the United Kingdom.
Nevertheless, Finland is a healthy member of the European community that’s being asked to put some of its reserves into a bailout fund. What did Finnish voters say?
“No, thanks.”
A nationalist party called the “True Finns” won nearly 20% of the vote on a Euro-skeptic platform opposed to the Portuguese rescue and other bailouts. That number is up from a 2007 election in which the True Finns only controlled 4%. The Centre party was nearly cut in third to accommodate the conservative group.
What does this mean for Europe? Not much, just yet. But Germany is already frustrated from having its hard work distributed to lazybones and beach bums in the south. If they take Finland’s bailout rejection as a precedent, we could be looking at another game of chicken.
The European debt crisis almost sent America into a double-dip recession last year when Chancellor Angela Merkel stalled on talks to rescue Greece from its financial woes. Although her coalition has been weakened recently, she was reflecting Germany’s hesitation at the time.
She’s still in power and it’s possible she’ll take cues from Finland and from Iceland, whose taxpayers recently said no to a repayment referendum. Their decision to keep Icelandic taxpayers from paying failed banks’ lost deposits is, in my opinion, part of a larger sentiment in northern European countries to teach the southerners a lesson.
It’s difficult to know which move is correct. I can clearly see northern Europe in the role of the hardworking ant and southern Europe as the lazy grasshopper. The grasshopper goofed off all summer and now it’s come to the ant’s door for food and shelter during the winter. Perhaps the best way to teach the grasshopper a lesson would be to leave it out in the cold.
I can also understand the need for a bailout. Germany and Finland have benefited from membership in the European Union and should be keen to see it healthy. If they don’t pony up the cash for Greece and Portugal, they could damage the Union as a whole. After all, how many businesses want to invest in a country that’s part of a troubled consortium?
Better to reassure investors with a strong safety net while repairs are being made.
Live well, live well within your means, and remember – that’s how the Solvency Shark seas it!
*My grandfather or great-grandfather came to America from Finland. I can’t remember which one, but either way: go Finland!
Stewart Pelto

Stewart Pelto

Stewart Pelto is a recent graduate from the University of North Carolina at Chapel Hill. He is now the proud recipient of a Master’s degree in French Literature – a degree that honed the same researching and writing skills he uses to write informative articles today. While pursuing this degree, he taught French courses to undergraduate students for two years. What he enjoyed most about the position was the challenge of making difficult concepts readily understandable and accessible to all.

He served as a Senator for the Graduate and Professional Student Federation, fighting to keep tuition costs down for graduate students struggling with their finances and student loans. He also developed his budgeting skills during his time as a Treasurer for the Graduate Romance Association. He enjoyed becoming more active in his local community and working to make a positive effect on his surroundings.

While an undergraduate himself, he spent a year abroad in Europe earning his degree in Spanish and French. While studying in both Sevilla, Spain, and Montpellier, France, he was exposed to the everyday reality of living under different economic and financial systems. Among other interesting travels he has made is a financial pilgrimage to the Spanish stock market in Madrid.

Stewart Pelto brings his rigorous academic education and his international experience to the problem of raising credit awareness and promoting financial responsibility. He hopes that his articles will teach his readers about debt and credit in an easily accessible and readily understandable way.
Stewart Pelto