Will The Finnish Vote Dead End Europe's Bailout Bonanza?

Tyler Durden's picture

The early Finnish votes are in and it does not look good for Portugal. As Reuters reports, Finland's anti-euro True Finns made huge gains in an election on Sunday, raising the risk of disruption to an EU bailout of Portugal. The right-leaning National Coalition topped the ballot, gaining just over a fifth of all votes. Party leaders will start talks soon on forming a new government. The problem is that as the anti-euro moniker indicates, the True Finns are pretty much hell bent on vetoing the Portugal bailout which means the ongoing annexation of Europe's periphery by Olli Rehn is about to finish (and yes there is a finish-Finnish joke in there somewhere). Per Marketwatch: "Early results Sunday from Finland’s parliamentary elections suggest the anti-EU bailout True Finns party will hold the second-most number of seats and could even be part of a coalition government. Such an outcome may mean the EU’s planned bailout of Portugal is vetoed by Finland, a move that would roil the euro-zone markets. With half the votes counted the True Finns were on 19% support, and on course for 41 seats, tied with the Social Democrats and one seat less than National Coalition Party’s predicted 42-seat haul, the BBC reported. Finland is the only euro-zone country that requires bailouts to be approved by its parliament. Strong gains by the True Finns could derail a planned rescue for Portugal." What this means is that Goldman Sachs' European analysts will be scrambling all night to come up with loophole to European law that will not result in an epic plunge for the European currency, as apparently not even that sage among sages, Thomas Stolper, whose 2010 batting average of 0.000 made his contrarian calls manna from heaven in the past year, could anticipate this Black Swan. We will keep you informed of all the sell-side spin as it starts trickling in.

In the meantime, here is more from Marketwatch:

A stronger-than-expected showing by the True Finns, “or if some members from other parties take a similar line, could make things very touch and go,” said Steven Barrow, currency and fixed-income strategist at Standard Bank. “And clearly if there’s any possibility at all that Portugal might not get its money, it could hit bonds and the euro hard.”

Strategists note that the main opposition Social Democrats have hinted they may also oppose a bailout. The center-left Social Democrats opposed bailouts for Greece and Ireland.

The Portuguese bailout remains unlikely to be derailed, “but caution seems to be the watchword here until we can be sure that Finland can’t upset the party,” Barrow said.

European Union officials hope to finalize negotiations by mid-May on a Portuguese bailout expected to total around 80 billion euros ($115.7 billion).

At the least, True Finn’s ability to tap into anger over euro-zone bailouts may mean the next government draws an ever harder line in negotiations over Finland’s role in future rescues.

Much of the True Finns party’s recent success has been attributed to its leader, Timo Soini. The 48-year-old politician is often described as folksy and charismatic, with a reputation for witty speeches and vivid metaphors.

“How come they can’t see the euro doesn’t work?” Soini told Bloomberg earlier this year. “If a melon and an apple each wear the same size baseball cap, everyone can see that just doesn’t work.”

Well, when Europe is run by a man who tweets haikus and comes from a country that hasn't had a government for the longest amount of time in modern political history, logic probably is not the failing monetary union's strong suit.

So just how real is the threat of a derailment of the encroaching bailout scheme:

Pasi Kuoppamaki, chief economist at Sampo Bank in Helsinki, said negotiations to form a new government could take some time. And if the True Finns become the third- or second-largest party in parliament, there could be reverberations in the financial markets, he said, speaking before the polls opened.

But like many observers, Kuoppamaki is not convinced that the True Finns would be in a position to block bailouts or increased rescue funding even if they were able to secure a junior role in a new government.

Finnish officials, however, reacted to the True Finns’ rise by offering tough talk on bailouts.

Finance Minister Jyrki Katainen, leader of the pro-EU National Coalition Party, warned at last week’s meeting of EU finance ministers that Portugal must implement additional austerity measures that go beyond the proposals rejected by the nation’s parliament in March.

And Finland last month balked at committing to a previously-outlined plan for the euro-zone’s AAA-rated nations to boost guarantees to the EFSF. Prime Minister Mari Kiviniemi, who heads the Center Party, said the decision should be made by the nation’s next parliament. EU leaders agreed to finalize the plan in June.

The BBC reported Sunday that while Katainen’s NCP will remain the largest party, Kiviniemi’s Center Party’s number of seats may fall to around 36. Even before the election, Katainen was seen as a strong possibility to lead the next government as prime minister.

But even if Finland is not the proverbial straw on the camel's back, one is certainly coming. At this point well over half of Europe has had it with the decade long failed EUR experiment.

Randolph sees little chance Finland will turn away from the euro zone in the wake of the elections.

“More worrying is the general spread of populist and nationalist politics in the EU,” Randolph said.

French President Nicolas Sarkozy’s UMP party suffered big losses in regional elections in March, with the far-right National Front making large inroads, he noted.

The tone makes it more difficult to sell austerity in debtor nations and to make the case for backing the euro and the EU in creditor countries, Randolph said.

So far the EURUSD is trading stead, even as silver just took out $43.20. Something tells us the next FX regime will not be one marked by continuing strength of a currency whose ever greater number of constituent countries continue to exist purely on the luck of the draw, or the ever angrier populist vote.

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Infinite QE's picture

To the saunas......

Ahmeexnal's picture

Silver broke 30euro/ozt.

Catalunya is about to break free from the chains of Spain and issue its own currency.

It's happening...now...the death of the euro.

Long-John-Silver's picture

Wild swings in Silver tonight. Looks like the shorts are attempting to get it below $43 without any success. Hopefully it will break $44 and if it's starting a secular bull run we may see $45 today as well. That will setup $50 by Friday or early next week.

bigdumbnugly's picture
Will The Finnish Vote Dead End Europe's Bailout Bonanza?

 

yes, it will finnish them.

 

yuck yuck

Rider's picture

 

Just like the independence of the Republic of Texas.

Catalans sucked the tit of the government for many years getting most of the government  investments, now they are biting the hand who fed them in the past.

WestVillageIdiot's picture

Remember the Alamo, bitches. 

Pool Shark's picture

 

Actually, Catalonia and the Basque regions were the most repressed by Franco (who made it illegal to speak Catalan). Makes sense they would want secession...

 

WestVillageIdiot's picture

I was just over there.  I thought it would be interesting to get a sense of what was going on politically and economically.  I never got a sense.  I guess I was too much of a visitor.  I did help out the economy a lot, especially the brewers of Estrella.  I must say I was very disappointed with the food.  I had a paella in Sitges that was incredibly disappointing.   I can find 5 places within a mile from me that have paella that would have put it to shame.

It is my understanding that Ireland and Spain both grabbed the EU bucks with both fists.  Now, they are acting like all of those "homeowners" that cry predatory lending.  I'm not saying that I side with the financial elites.  I'm just saying that I hear a lot about "victims" but see so few of them.  I work with several Irish.  I remember when I was telling them in 2006 that the Irish miracle would end in tears.  They thought I was nuts.  All of their friends and relatives were doing great financially, especially the ones speculating in........drum roll please............real estate.  The ones speculating in Spanish real estate were really kicking ass.

The global financial clusterfuck is like a diamond.  There are so many facets.  Every time you look at it from a different angle you see something you never noticed before. 

It was fun seeing Roger Waters perform The Wall in Barcelona.  Something seemed right about it.

Roger sang, "mother, should I trust the government?"  The words "No Fucking Way" flashed across The Wall.  You can Roger that. 

Treason Season's picture

You don't go to Spain for the beer but thanks for the summary nonetheless.

alpha60's picture

word. had same disappointment in spain 18 months ago. thought i'd check out soon to be cheap real estate, spent a month driving from barcelona down the coast, then to lisbon, then south. what many readers may not realize is that tapas is actually spanish for 'unedible shite.'

though barcelona can be fun, overall the spanish coast was dirty, expensive and full of moderate to bad service, bad food. everybody seemed to be an f-uvalot richer than me, cause 5 euro waters didn't phaze 'em. 

the toll roads, built in parallel to the non-toll roads were gourgeous (and empty) and cost me about 60-80 euro a day. and those windmills.

found about nothing in spain, maybe i wasn't looking well enough. i hear basque country is pretty amazing.

Quintus's picture

Political parties all over Europe make Anti-EU noises during election campaigns, because they know that most Europeans want to roll back the unelected Supra-national political vampire squid that seeks to undermine our individual national sovereignties.  

However, it is remarkable just how quickly these same parties do a 180 degree turn as soon as they are elected and continue the same integrationist policies of the parties they have just beaten.  In Ireland's recent elections, for example, this U-turn took less than 3 weeks.  If the True Finns hold to the policies that won them so many seats in Parliament, it'll be a first.

I hope for the sake of all Europeans that they do, but I suspect that whatever tricks the EU used to bring previous Anti-EU parties into line will be deployed in this instance also.

chubbar's picture

That's because it is much easier for TPTB to sit down and explain the facts of life to one or two elected officials than sway millions of voters. Just ask Kennedy.

Quintus's picture

Imagine how much more efficient the EU will be when they finally dispense with the need to sit down with elected officials and tell them what their policies will be.  No need for all those silly 'Election' thingies.  No need for national politicians to prepare a set of 'Policies' that will need to be 'Fixed' by the Eurocrats after the election.

Oh yes.  Much more efficient.

4shzl's picture

Finns are the Angry Birds of the EMU.

Theta_Burn's picture

I don't care what Adam Ant says...Tom of Finland, you rock.

Now where the fuck are those 'true Americans?

I am Jobe's picture

True Americans are stufffing their face and watching a drug infested sports called MLB. Nothing new in the USA. Sheeples led to believe and ok with their TV shows and fast food.Don;t cut that cable , when they will rise up and say something.

Long-John-Silver's picture

If I could I would un-junk you.

Fred Hayek's picture

To bother to label any sport of any kind above the level of junior high school as "drug infested" is to indulge in redundancy. 

Caviar Emptor's picture

Yeah. If angered, True Americans might get drastic and tweet sardonically! Or they might get really extreme and crumple the paper napkins from McDonald's and throw them on the ground! Just yesterday I saw a snippy bumper sticker.....spooky 

WestVillageIdiot's picture

TPTB have developed the most amazing mind control device ever conceived.  It was so simple and so diabolical that it is scary.  I don't think its effects can be undone.  The masses are hooked and will not be won back.  The proles have no power to resist it.  It has stripped away any thought that Winston Smith may have had that revolution could begin with the proles.  The device is the cell phone.  There is no turning back.  Just watch the fucking idiots around you with their cell phones and try to convince yourself that this collection of morons is capable of anything productive. 

UGrev's picture

You gotta blend, though. I still do sheeple shit on purpose so I don't appear to be a "survivalist". Last night, at my wifes birthday dinner, I had to explain what FIAT was to 3 CPA's. Playing their game is equally as powerful. Look normal, act normal.. say shit that makes heads explode like "This here money is backed by the sheer fact of your birth and what your potential is to produce". Then you sit in awe of replies like "wait.. our money isn't backed by gold?"...  I almost choked on my scallop. 

Founders Keeper's picture

[I still do sheeple shit on purpose so I don't appear to be a "survivalist".]---UGrev

This comes up for me some times too. There are people with whom I share absolutely nothing. I act as though the economy is fine, getting better, recession is over, good times ahead, glad that's over, planning a vacation this summer. (Geez, I haven't "planned" a vacation in two years!)

But, if you're a "cool customer," love this country, and hold dear at least the basic principles of our nation's founding, I'll take a chance on you.

 

ZeroPower's picture

glad that's over, planning a vacation this summer.

 

Nothing wrong with enjoying fruits of the loom while you still can.

gorillaonyourback's picture

fuck em jobe, the ones that junked u r the same fat ass, dorrito eatin piles of shit that sit in front of the tv

Doña K's picture

We need a steady hand in Finland. Don't sell your souls to the banking cartels. Do the right thing.

Finn's picture

Sold that already in 1990. The politicians paid the price when national referendum in 1994 stripped them of power, by joining EU.

WestVillageIdiot's picture

1940:  The Finns fight off an invasion by the Soviet Union

1990:  The Finns roll out the welcome mat to the EU.

What a shame.  So many proud peoples have been sold out.

Finn's picture

Much more complicated than that. When your politicians sell your economy to banksters and TSHTF, do you reward them by allowing them business as usual, or do you strip them of power to repeat it? Oh yes, sorry I forgot, in US it's the former.

Finland did gain a lot from the Euro, not the least of which was extreme currency stability and very reasonable interest rates. Markka was destroyed, yes, but not by joining the Euro, it was crushed half a decade earlier by international speculators. Once your interest rates hit 20% and unemployment is 18%, the benefits really tend to seem like something you want.

Finland did survive, but it was real tough for the citizenry for the whole decade, and there's the big reason why my generation tends to look at the PIIGS struggling with auterity measures, and say BTDT.

Racer's picture

Funnymentals are irrelevant, the FED is GOd

IdioTsincracY's picture

As everybody seems extremely worried about the EU, what is happening over there, albeit in a messy way, is a re-balancing process of the economies, that will lead to some sort of stability. Even though private investors will eventually take some losses, it will not be the disaster that everybody expects.
Actually it looks like the UK might end up being the biggest European problem (but this is for another day).

On the other end, the situation in the USA will most likely deteriorate greatly this fall when budget (political and financial), T-Bond, and Dollar crisis will hit at the same time possibly causing another historic crisis, only this time with the additional problem of high real inflation and weak job market.

I think that the two nations that bet everything on financial services (USA and UK) will again bring down the world.

WestVillageIdiot's picture

Hand 20 people at random the same size of shoes and then tell them to run a 100 meter dash.  Wait to see how long it takes 15 of them to fall on their face. 

I am Jobe's picture

Agreed. However there are very many who already have and continue to be debt slaves and have not  woken up.

jkruffin's picture

Can I say?

Gold and Silver Bitchezz............

or is that already taken?

Long-John-Silver's picture

Gold and Silver continue trending up. Gold=$1,488.10 Silver=$43.26

WestVillageIdiot's picture

For dinner tonight I had two fillets of American silver eagles lightly broiled with a side of au gratin Krugerrands. 

It was delicious. 

tiger7905's picture

Norcini comments silver miners are obscenely undervalued due to ratio trade.

http://goldandsilverlinings.com/?p=682

disabledvet's picture

Nokia, bitchez!  (How do you say that in Portugese?)

Lord Welligton's picture

"Nokia, bitchez!"

Same the world over.

disabledvet's picture

"el texto messego."  as in "you go el broko, El Euro Loco."  Now will you marry me Margaret Brennan?  I have no reputation to uphold whatsover--THAT i can promise!

Rhodin's picture

With luck, the Euro will be truly Finnish(ed) soon.  Does that give the dollar an extra month, or three?

Long-John-Silver's picture

About as much time as the second domino in line as someone knocks over the first one.

WestVillageIdiot's picture

What country will claim the yen if Japan becomes uninhabitable? 

Lord Welligton's picture
Will The Finnish Vote Dead End Europe's Bailout Bonanza?

I pray to any God that exists that it does.

End the madness now.

 

 

Finn's picture

You can pray to anyone you believe in, but as for us, we voted for the change. The Common Finns became immediate major party. This has not happened since 1945. 

BTW, the party should not be called "True Finns" as many publications put it, it does not give the implications that are in the original word: the common people, necessary co-operation, and self-sacrifice if needed.

digalert's picture

We'll see... kinda like how the US had that disastrous November democrat house cleaning. Won on promises to end Barama-care, cut the spending, debt, blahblahblah. Now they're saying "well it's not that easy, gonna take time", ya right. Furthermore, as I recall most of america was against TARP, but we got it anyway. No more bailouts.