- Finland is possibly contemplating leaving the EU.
- The concern is the shared debt within EU member nations post-Coronavirus.
- Protectionism is on the rise in Europe.
Finland might leave the European Union. The conundrum for Finland is that after the coronavirus pandemic, EU member nations will have financial difficulties. It is highly likely many EU member nations will also enter full recession. The way the EU functions, the debt is shared. Therefore, Finland has no desire to repay the debt of others.
The UK set a precedent of leaving the EU. Currently, the Finnish government is adamant that the country is not going to help other nations financially. Statements appeared in the Finnish media over the weekend that Finland would rather leave the European Union than subsidize other countries. Therefore, Finland will not cling to Euro at any cost.
If the statements are accurate, it would mean the Finnish government is working on a contingency plan to leave the EU. It would mean returning to their national currency and purely national interests. One side of Finland is pro West and one side bordering Russia is pro-Russia.
Finland does want to be a member of the EU and the benefits the membership provides to the country. Yet, Finland is ready to leave the EU in the best interest of the sustaining their own economy. The commentary is not a surprise, as the rise of populism is happening again.
The whole purpose of the European Union is to be united. However, a myriad of the 27 EU nations decided to invoke protectionist measures during this roaring global pandemic. They restricted the selling of face masks, medical equipment and drugs. Ironically, not so long ago populist movements (stoked partially by Russia and candidates in France like Marine Le Pen) propagated protectionism and were considered the villains of the EU. Suddenly, these same nations are hoarding medical supplies and only dealing with their own national interests.
At this point there are only claims in the media, there have not been any official statements from the Finnish government.
Helsinki expressed reluctance to allow the European stability mechanism (ESM) to buy bonds on the secondary market as part of an agreement reached last week at a summit in Brussels, where strong statements were made about measures to support countries that are currently deprived of investors (Spain and Italy).
Last year, Helsinki demanded and received during the second bailout plan for Greece a guarantee of a refund of the amounts advanced.
Last week, Finland announced the opening of bilateral talks with Spain to obtain similar guarantees in exchange for participating in a rescue plan for Iberian banks.
It is clear the EU will have a tough time this year. Coronavirus changed the economic trajectory of the EU. The hardship will continue and a recession is inevitable. At the same time national interests will continues to dominate the EU. At this time it is unclear if Finland in fact will leave the EU post Coronavirus.