True Finns Timo Soini Issues Statement: "Why I Won't Support More Bailouts"

Tyler Durden's picture

From The WSJ:

Why I Won't Support More Bailouts

Insolvency must be purged from Europe's system and it must be done openly and honestly.

When I had the honor of leading the True Finn Party to electoral victory in April, we made a solemn promise to oppose the so-called bailouts of euro-zone member states. These bailouts are patently bad for Europe, bad for Finland and bad for the countries that have been forced to accept them. Europe is suffering from the economic gangrene of insolvency—both public and private. And unless we amputate that which cannot be saved, we risk poisoning the whole body.

The official wisdom is that Greece, Ireland and Portugal have been hit by a liquidity crisis, so they needed a momentary infusion of capital, after which everything would return to normal. But this official version is a lie, one that takes the ordinary people of Europe for idiots. They deserve better from politics and their leaders.

To understand the real nature and purpose of the bailouts, we first have to understand who really benefits from them. Let's follow the money.

At the risk of being accused of populism, we'll begin with the obvious: It is not the little guy that benefits. He is being milked and lied to in order to keep the insolvent system running. He is paid less and taxed more to provide the money needed to keep this Ponzi scheme going. Meanwhile, a kind of deadly symbiosis has developed between politicians and banks: Our political leaders borrow ever more money to pay off the banks, which return the favor by lending ever-more money back to our governments, keeping the scheme afloat.

In a true market economy, bad choices get penalized. Not here. When the inevitable failure of overindebted euro-zone countries came to light, a secret pact was made.

Instead of accepting losses on unsound investments—which would have led to the probable collapse and national bailout of some banks—it was decided to transfer the losses to taxpayers via loans, guarantees and opaque constructs such as the European Financial Stability Fund, Ireland's NAMA and a lineup of special-purpose vehicles that make Enron look simple. Some politicians understood this; others just panicked and did as they were told.

The money did not go to help indebted economies. It flowed through the European Central Bank and recipient states to the coffers of big banks and investment funds.

Further contrary to the official wisdom, the recipient states did not want such "help," not this way. The natural option for them was to admit insolvency and let failed private lenders, wherever they were based, eat their losses.

That was not to be. As former Finance Minister Brian Lenihan recently revealed, Ireland was forced to take the money. The same happened to Portuguese Prime Minister José Sócrates, although he may be less forthcoming than Mr. Lenihan about admitting it.

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Why did the Brussels-Frankfurt extortion racket force these countries to accept the money along with "recovery" plans that would inevitably fail? Because they needed to please the tax-guzzling banks, which might otherwise refuse to turn up at the next Spanish, Belgian, Italian, or even French bond-auction.

Unfortunately for this financial and political cartel, their plan isn't working. Already under this scheme, Greece, Ireland and Portugal are ruined. They will never be able to save and grow fast enough to pay back the debts with which Brussels has saddled them in the name of saving them.

And so, unpurged, the gangrene spreads. The Spanish property sector is much bigger and more uncharted than that of Ireland. It is not just the cajas that are in trouble. There are major Spanish banks where what lies beneath the surface of the balance sheet may be a zombie, just as happened in Ireland for a while. The clock is ticking, and the problem is not going away.

Setting up the European Stability Mechanism is no solution. It would institutionalize the system of wealth transfers from private citizens to compromised politicians and otherwise failed bankers, creating a huge moral hazard and destroying what remains of Europe's competitive banking landscape.

Some defend the ESM, saying its use would always require unanimity. But the current mess with Portugal shows that the elite in Brussels will seek to enforce unanimity through pressure when it cannot be obtained by persuasion. Abolishing unanimity is only a matter of time. After that we have a full-fledged fiscal transfer union that is obviously in hock to Brussels' anti-growth corporatism.

Fortunately, it is not too late to stop the rot. For the banks, we need honest, serious stress tests. Stop the current politically inspired farce. Instead, have parallel assessments done by regulators and independent groups including stakeholders and academics. Trust, but verify.

Insolvent banks and financial institutions must be shut down, purging insolvency from the system. We must restore the market principle of freedom to fail.

If some banks are recapitalized with taxpayer money, taxpayers should get ownership stakes in return, and the entire board should be kicked out. But before any such taxpayer participation can be contemplated, it is essential to first apply big haircuts to bondholders.

For sovereign debt, the freedom to fail is again key. Significant restructuring is needed for genuine recovery. Yes, markets will punish defaulting states, but they are also quick to forgive. Current plans are destroying the real economies of Europe through elevated taxes and transfers of wealth from ordinary families to the coffers of insolvent states and banks. A restructuring that left a country's debt burden at a manageable level and encouraged a return to growth-oriented policies could lead to a swift return to international debt markets.

This is not just about economics. People feel betrayed. In Ireland, the incoming parties to the new government promised to hold senior bondholders responsible, but under pressure, they succumbed, leaving their voters with a sense of democratic disenfranchisement. The elites in Brussels have said that Finland must honor its commitments to its European partners, but Brussels is silent on whether national politicians should honor their commitments to their own voters. In a democracy, where we govern under the consent of the people, power is on loan. We do what we promise, even if it costs a dinner in Brussels, a "negative" media profile, or a seat in the cabinet.

When in Europe's long night of 1939-45, war came to Finland with the winter blizzards, my mother was one of eight siblings being raised on a small farm in central Finland where my grandparents eked out a frugal living. My two young uncles rushed to the front and were both wounded in action during Finland's chapter of Europe's most terrible bloodshed. I was raised to know that genocidal war must never again be visited on our continent and I came to understand the values and principles that originally motivated the establishment of what became the European Union.

This Europe, this vision, was one that offered the people of Finland and all of Europe the gift of peace founded on democracy, freedom, justice and subsidiarity. This is a Europe worth having, so it is with great distress that I see this project being put in jeopardy by a political elite who would sacrifice the interests of Europe's ordinary people in order to protect certain corporate interests.

Europe may still recover from this potentially terminal disease and decline. Insolvency must be purged from the system and it must be done openly and honestly. That path is not easy, but it is always the right path—for Finland, and for Europe.

Mr. Soini is the chairman of the True Finns Party in Finland.

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silvertrain's picture

The Tea Party goes global..

topcallingtroll's picture

It was inevitable.

The tea party movement will be the great revolutionary event of the 21st century.

They really insist on cutting government spending. They so far have not been co-opted yet.

International tea partiers of the world unite!

We will call ourselves tobblies. ( might be a bit arcane)

cossack55's picture

The Finns may have to go with "Vodka Party", sounds like more fun anyway. 

I hope this cat stays out of hot tubs, risky since they are so popular there.

Ahmeexnal's picture

Funland is the next NATO no-fly zone. When Sarkozy and Merkel send the troops to take over that rouge nation, they will comply.

Timo will change his name to Timmy.

ivars's picture

In that rogue nation, every family has guns-32 per 100 residents. Similar style army to Swiss. So be careful.

Sudden Debt's picture

The proposition makes to much sense. Vodka or not, even the most drunk Euro Parlement Councel Dictator won't agree with it.

There aren't enough bribed into this "idea"!




Oh regional Indian's picture

Coss, VodPar sounds good, but the bigger question should be, are we seeing EU stress along Viking/Non-viking lines too? Or is it Nordic vs. the rest? They do have the best oil, ladies and sense of themselves in all of the EU.

I see that rift (iceland, Finland to begin) as an interesting side-light. Because the way the world is going, they are going to be the new tropical paradisos' in Europe.

Finland. Sounds aquatic to me.


Dr. Impossible's picture

"We will call ourselves tobblies. ( might be a bit arcane)"

..can't we call ourselves something more modern like ...."The Cockney Rebels" or something?


Calvin Jones and the 13th Apostle's picture

What Tea Partiers are advocating the TBTF's like Goldman Sux be allowed to fail?  I haven't heard it.  And I don't mean the Ron Paul people.  I mean the corporate astroturf types.

Jim in MN's picture

Indeed, tell me a set of publically stated positions from any Tea Party source that would be inconvenient for Koch Industries, Halliburton or their other paymasters.

You won't be able to because it doesn't exist.

If a 'True Americanskis' party is to start, it will have to go after corporate corruption and the uberelite up front.  TP is EPIC FAIL to date.  Pure divide and conquer for the serfs.

cossack55's picture

As usual, Jim, you are too right.  The Tea Party was so quickly and pervasively corrupted, they should use the methodology as an example in Ivy League schools for years to come.

jplotinus's picture

I agree. The Tea Party has, to my knowledge, said little or nothing about TBTF bank bailouts. Generally, the TP claim is that "your health is your problem," seeing social spending as something that they, as rugged individualists, would prefer not to have as a parft of their desired social fabric. But, as to banks, the main thrust of the TP opposition seems to be towards assistance being given to community banks to the tune of $30billion.

Resucing community banks (i.e., those that actually provide banking services to local communities and that do not have a free pass to Fed printed money) has the TP in an uproar.

Rescuing TBTF banks and cutting the gargantuan spending on militarism do not appear to be TP priorities. 

Robert Neville's picture

I have attended Tea Party rallies since 2009 and the bailouts and crony capitalism are always a hot topic. The has Tea Party has no national leaders and no true organisation. Anyone who claims to speak for us is a pretender. You are correct that most of us are individualists but we detest having our money stolen by government for any reason, not just health care. I have always been opposed to the actions taken in the middle east and I would like to see us pull our military out all foreign countries unless they are willing to pay for the cost of us being there. The media has done it's best to portray us as a bunch of redneck racists that are opposed to government health care, but nothing could be further from the truth.

BobPaulson's picture

You're kidding right? The Tea Party is a way of the TBTF banks to coopt the rage and make them think they're doing something when they are not.

Tempest in a Teapot.

Monumental fail.

cossack55's picture

More like Tampon in a Teapot.

Azannoth's picture

Don't equate a far-right religious movement in the USA with clear thinking people of Europe

cossack55's picture

Or with clear thinking people anywhere.

Robert Neville's picture

You are not thinking clearly if you think the Tea Party is a religious organization. Try Attending a rally instead of forming your opinion from articles in leftist rags.

aint no fortunate son's picture

that doesn't sound like the tea party - it sounds like good old plain common sense to me... pure, unarguable logic. Oh, but wait... bankers and paid off politicians don't like logic or common sense.

This guy ought to be chairman of the FRB.

caconhma's picture

"The Tea Party " is a zionist ass-kissing and Rothschild criminal family POS.

Palin, a great political blabbermouth as a party leaders? You must be an imbecile.

The Tea Party leaders will sell people for few free tea cups and donuts.

America deserves better than few slimy assholes masquerading as people representatives. Paying less taxes and fighting more and more no-win wars? This fucking calculus does not add up!

ivars's picture

You already have the best of the best. THE obama.

Papasmurf's picture

The snake has to heads.  One eats you faster.  The other head eats you slower.  It's the same snake.  Now we have the snake the promised less blood and murder, so we got more.

Thunder_Downunder's picture

"Tea Party Goes Global"


Oh.. right. So they're a socialist democratic party now are they? 


Forgive my ignorance, but I thought they were a confused milling of disenfranchised replublicans...


I'm not entirely sure it would be possible for a blue blooded American politician to understand moderate social democratic politics...

hugovanderbubble's picture

Just in Europe?


and in US? Japanese BankS?


US muni bonds are whole in default WHOLE.....

UK internals are crappy figures cooked just for Olympic Games,

Whole World needs mega deflation to restart the system.


Come on, what a biased article.

youngman's picture

Hear Hear.....this guy is spot on.....I wonder if he has a USA long form birth certificate to run for President here...on the other hand..he does not need one now....I want to buy something Finish...what do they sell that I can buy to help them out..????

cossack55's picture

I'll be buying a 3' x 5' Finnish flag to fly under the 4' x 6' Iceland flag that has replaced the Bennington flag I used to fly.  I can no longer identify even 13 states worthy of the title.

topcallingtroll's picture

Vodka. I cant remember the brand.

Jim in MN's picture

The cognac they drink is called Monopole because the state alcohol monopoly just takes whatever they can buy from abroad and lets it mix in the shipping tanks.

Charming and quite good.

Frein's picture

Some choices:

1) You can buy a Nokia phone while the HQ still remains in Finland.

2) Buy a Finnish video game like Angry Birds to whatever tech gadget you have, Alan Wake for the 360 or Trine for PC/Mac/PS3.

augie's picture


what he said.

breezer1's picture

some sanity at last .

anony's picture

Only one impossibly, insurmountable problem:  The assumption that the 'growth-oriented' policies will materialize.

The one Essential fact that is either purposely ignored, ignorantly overlooked, or sinister in that a few are aware of it and will not speak out is this---

OVERPOPULATION in the context of too few----- by a couple billion or more---JOBS to do and that ----in the context of what needs to get done and isn't for lack of properly trained human beans----need to get done.

Without that absolutely being divined, created, or mandated the only choice any government has to is to spread the pain over as many people as possible until such time as industries manifest themselves that will use up the available surplus humans that must eat, drink, be amused lest they resort to crime, and reproduce yet more humans.

Likely the elite know this.  They live in an entirely different universe, since their necessities have been met for many generations to come.  The government Hacks they hire know it but any one of them that says it, is likely out of a job if not recalled.

Malthus in a  perverted way was right.

cossack55's picture

I would assert that Malthus and Darwin were both right in a perverted way, that is, if you define perverted as reality.

LawsofPhysics's picture

I agree, the elite have long recognized that "humanity" as a whole will never live within its means with regard to the laws of physics and Nature.  Feed the masses propaganda and religious bullshit because they can not handle the truth.  The elite live in a different world where they protect each other and their offspring (in so much as they can) for generations to come via a co-opted government.  So if the "average" citizen is being set up for failure, the solution seems perfectly clear, do not be average.

newworldorder's picture

I am convinced this is the great "fear" among the worlds ruling elite - overpopulation and what to do (if anything) about it. Not so much from a caring perspective, but from the concept of retaining their wealth and power over the great unwashed.

BigJim's picture

You're suffering from the 'lump of labour' fallacy. Look around you - there's no end of things to be done, the problem is that the additional government-inflicted deadweight costs make it uneconomic to hire people to do it.

ivars's picture

Great stuff. Wonder when some other real economies get such guys at power? Now too long to wait. The USA?

My bet was 2012, but perhaps only 2016, and in more dramatic form.


bigdawg's picture

"This Europe, this vision, was one that offered the people of Finland and all of Europe the gift of peace founded on democracy, freedom, justice and subsidiarity. This is a Europe worth having, so it is with great distress that I see this project being put in jeopardy by a political elite who would sacrifice the interests of Europe's ordinary people in order to protect certain corporate interests."

Wasn't this the plan of the elites all along?

digalert's picture

Sounds fine and dandy, but then again, talk is cheap. Until I see some "major" aka TBTF failures and some bankster perp walks, I call Mr. Soini's statement BS.

Quintus's picture

Jeez.  Give the guy a chance - he's not even in power yet.  Coalition negotiations are still ongoing AFAIK.

newworldorder's picture

Any bets on when we will hear or read something similar and worded this bluntly from an American politician?


Alex Kintner's picture

Bernie Sanders has been railing against the Banksters for years. He and a literal handful of others. But there aren't enough 'un-bought' congress critters to do any good.

pasttense's picture

Finnland has a population of 5 and a half million--out of a European Union population of 500 million. So how influential can he be?