Wednesday, April 20, 2011

Update: Real Finns make stunning election gains

The Euro has been generally popular in Finland since its introduction.  While the economic benefits have been questionable, there is strong sense that using the Euro gave Finland membership in a very exclusive club.  The Finns have rarely been invited to the best clubs even in Finland for most of her history--those have been operated by her Swedish and Russian colonial masters.  So flattered by being admitted to the Euro, Finland has been one of its most diligent supporters.

The fact that a right-wing populist threatens to upset Finland's cozy relationship to the Euro is probably very upsetting to the educated and respectable Finns.  Timo Soini and his Real Finns are a real embarrassment to them.  (BTW, my sources in Finland say "True Finns" is a bad translation.  They say Real Finns is much closer to the original meaning.  So I will use Real Finns even though others may still use True Finns.)  And they have reason to worry.  Soini has the potential to do serious damage to the whole idea of the Euro.  From Helsingin Sanomat

EDITORIAL: Timo Soini rewrote the electoral history books
An exceptionally exciting general election culminated on Sunday night in one historic victor above all others: Timo Soini and his True Finns. The populist opposition party got the ground-shaking surge that Soini had predicted and leapt from being a grouping with just five seats in the outgoing Parliament to become the third-largest party in the country, with 39 MPs and a 19% share of the vote. The National Coalition Party, too, enjoyed a historic victory of a kind, albeit not with a historically high share of the total vote. For the first time in the party's history, the National Coalition became the largest grouping in Parliament, with 44 seats. The party chairman Jyrki Katainen, as prime minister designate, will be the first who is charged with attempting to form a new government. It will be no easy task.
National Coalition Party 44 seats (-6) 20.4%
Social Democratic Party 42 (-3) 19.1%
True Finns 39 (+34) 19.0%
Centre Party 35 (-16) 15.8%
Left Alliance 14 (-3) 8.1%
Greens 10 (-5) 7.2%
Swedish People's Party 9 (0) 4.3%
Christian Democrats 6 (-1) 4.0%
Others 1 (0) 2.0%
Finnish election has implications for euro crisis
Commission notes that Finland is already committed to Portugal bailout
The result of Sunday’s Parliamentary elections in Finland pushed the country into the centre of the crisis of the euro zone.
Much could be riding on Finland. If the new Finnish government and Parliament do not give their backing to the EUR 80 billion loan package approved for Portugal, the whole bailout plan will collapse.
The rules of the temporary crisis fund, the European Financial Stability Facility (EFSF), are clear: A decision on providing funding for a euro country in trouble – Portugal in this case – needs to be made unanimously.
The European Commission noted on Monday that Finland is already committed to helping Portugal. Finland gave its political commitment to using the EFSF at a meeting of EU ministers of finance just over a week ago in Gödöllö in Hungary.
According to the European Commission’s main spokeswoman, Pia Ahrenkilde Hansen, the Commission has full confidence that Finland will meet its obligations.
“Nothing has changed from our point of view”, Ahrenkilde Hansen said in response to speculation that there may be a contingency plan.
Finland needs to clear up its view on helping Portugal by mid-May at the latest. It is at that time that the EU foreign ministers are to agree on the Portuguese bailout package and how it is to be financed.
Special arrangements to accommodate Finland are not in the cards. If Finland does not start helping Portugal along with the others, it will cost Finland dearly in political capital.
On Monday, the Commission and the euro zone countries were careful not to add to pressure on Finland. Ahrenkilde Hansen, who serves as the spokeswoman Commission President José Manuel Barroso, a Portuguese citizen himself, said that Finland should first draw up a government programme. more
Of course, the Germans are concerned about the events in Finland because they too are supposed to fund the bailouts of places like Greece and Portugal.
Election Success for the True Finns
Finland's Right Turn Spells Trouble for Europe
The right-wing populist party True Finns won 19 percent of the vote in Finland on Sunday. The euroskeptic party has said it is opposed to a bailout package for Portugal, which could spell trouble for the euro zone.
Now, it is Finland's turn. Following in the footsteps of several northern European countries in recent years -- and continuing a trend that has been particularly apparent in Scandinavia -- Finnish voters on Sunday threw substantial support behind the right-wing populist party True Finns.
The party, led by Timo Soini, 48, grabbed 19 percent of the vote, more than quadrupling its result in 2007. And while Soini adheres to the standard collection of xenophobic and anti-Islam positions common to the right wing everywhere, it is his party's position on the euro which has engendered the most concern across Europe.
"We have to this point been too soft when it comes to Europe," Soini said on Monday, basking in his election success. "That has to change." In particular, Soini said, the euro-zone bailout package currently being designed for Portugal must be revisited.
While the results are not yet final, the True Finns are now set to be the third largest party in the Finnish parliament, behind 20.4 percent for the National Collection Party -- which for the first time in its history received the most votes of any party in the country -- and the Social Democrats, which received 19.1 percent. The Center Party of incumbent Prime Minister Mari Kiviniemi came in a disappointing fourth with 15.8 percent, meaning that Kiviniemi will hand over leadership after just 10 months in office.
Gray Hair for Europe
Even more concerning for Brussels, Finland's Social Democrats are also extremely skeptical of euro-zone bailouts. The party voted against the bailout packages for both Greece and Ireland. But the governments of Kiviniemi and her predecessor Matti Vanhanen -- both of which led centrist-center right coalitions -- supported the aid packages.
"The result will give Europe gray hairs," political analyst Olavi Borg told the Associated Press. "It will cause them problems over the bailout funds." Bailout packages under the European Financial Stability Facility (EFSF) require the support of all countries in the euro zone, of which Finland is a member. more

Triumph of Right-Wing Populists
How Dangerous Is Finland to the Euro?
An Analysis by Sven Böll and Maria Marquart   04/19/2011
Will the election of right-wing populists in Finland derail the euro rescue package? A Helsinki veto would indeed be expensive for the rest of the euro zone, particularly for Germany. Experts are also warning that other European countries may follow suit if Finland decides to pull out of the euro bailout.
Across the 17-member euro zone, government heads had a hunch April 17 might not be a very good day for the future of Europe. The strong ballot box performance of the euroskeptic True Finns means it is very likely the party will be part of the next government. It appears that a country long seen as an EU anchor may soon become a source of irritation for Brussels and in capitals across the bloc.
During the election campaign, True Finn party head Timo Soini lashed out repeatedly against the European Union and bailout plans for debt-ridden euro-zone members. Bolstered by an election that saw the party more than quadruple its standing, with 19 percent of the vote, an emboldened Soini remained vocal on Monday, saying it was unacceptable that Finland "must pay for the mistakes of others." And that "the content of politics must change. We have been too soft on Europe."
Does the party represent a threat to the common European project? Do Finland's right-wing populists truly have the power to bring the euro to its knees? Or does it merely have the capacity to create a threat to the euro's stability and thus protract the current currency crisis?
If the party becomes part of Finland's next government, that answer could come within a matter of weeks. A coalition between the conservatives, who drew the most votes, the opposition Social Democrats and the True Finns is one viable option currently being discussed.
Will Remainder of Euro Zone Be Left to Foot the Bill?
Under current euro-zone rules, all 17 members must approve bailout packages for countries in need -- and next month, an €80 billion package for Portugal is up for approval. During the campaign, Finland's major parties said they wouldn't form a governing coalition with the True Finns if doing so would create a threat to the future of Europe's common currency. As such, it seems likely that, should the True Finns join the government, the party's euro-critical positions will be watered down. It remains possible, however, that a future Helsinki coalition could refrain from vetoing a bailout package for Portugal, but would then refuse to provide funding. more
They even noticed the Finnish elections in New York.
How A Finnish "No" On Portugal Could Be The Domino That Cracks The Euro
Gregory White | Apr. 19, 2011
We told you earlier how Finland may not take down the Portuguese bailout, but there's still reason to believe their government's actions could set off a chain reaction that brings down the currency union, according to Der Spiegel.
Finland may be able to back out of participating in the Portuguese bailout, without saying no to it happening. Instead, they'll just be able to avoid paying for it.
What happens then, according to Der Spiegel, is what really counts. The remainder of the eurozone's leaders might get together and stand behind Portugal, with AAA rated countries like Germany and France giving more cash. OR, the move by Finland could lead to the spread of right-wing, euro-skepticism across the continent, and if not stop the Portuguese bailout, prevent the new bailout fund, the ESM, from being approved.
The right's rise in Europe is already well evidenced. The Finnish example could act as a political trigger which turns every future eurozone election into a referendum on bailouts.
The first big one to watch would be France in April 2012. There Marine Le Pen, head of the Front National, is already rising in the polls. Sarkozy, the center right candidate, is sinking, while IMF chief Dominique Strauss-Kahn looks likely to run as the socialist candidate. more

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