Finland's Foreign Minister Says Country Should Have Never Joined The Euro

Back in August, we brought you “One Country’s Grim Assessment Of Greece’s Future” in which we highlighted comments from Finnish Foreign Minister Timo Soini.

“Truth is the strongest force. We should admit that this isn’t going to work,” Soini said, criticizing Brussels’ decision to back a third bailout program for Athens after a summer of fraught negotiations. “I hope that the EU and euro zone, that in due course, we can face the facts and say enough is enough and that we must do something else,” he continued.

Well as it turns out, Soini thinks Finland “must do something else” when it comes to its participation in the single currency. Echoing sentiments espoused by Center Party politician Paavo Vayrynen - a former foreign minister who has pushed for Finland to exit the euro - Soini bemoans the fact that his country can’t resort to currency devaluation to boost competitiveness. 

“Debate on the subject will gather steam,” Soini said in Helsinki on Tuesday, before noting that unfortunately, a referendum on a euro exit “wouldn’t provide [short-term] solutions [because] the fact is that Finland is a member of the euro area.”

That “fact”, Soini says, is to blame for Finland’s slumping economy, which has contracted for three years running and turned in a decidedly bad Q3 in route to what may well end up being a fourth consecutive year of recession. 

"This might seem an odd record for a country whose sovereign debt still enjoys the rare accolade of a Triple-A rating, whose government debt-to-GDP ratio remains a relatively modest 62%, and which didn’t experience a banking bust," WSJ opined last month. "The simplistic answer is to blame the euro [because if] Finland had retained its own currency, it could have responded to shocks by devaluing to regain competitiveness, as it did in the aftermath of its financial crisis in the 1990s," The Journal adds. 

“Without the option of currency devaluation, the government has calculated that Finland needs to lower its labor costs as much as 15 percent to catch up with its main trade partners, Sweden and Germany,” Bloomberg writes, adding that “Finland will be the weakest EU economy by 2017, when it will grow at less than half the pace of Greece, according to the European Commission.”

Even if, as The Journal and others have suggested, Finland's economic problems stem more from a lack of free market reforms than from the country's adoption of a currency it doesn't print, Soini has other bones to pick with Europe.

“Schengen will probably not be declared dead, but it probably won’t be followed anymore,” he says, effectively writing the EU's obituary in the wake of the flood of refugees that have inundated the bloc. Although Soini has said that “terrorism and the refugee crisis should not be confused with one another [as] there is a danger that innocent people fleeing tyranny and terrorism will come under suspicion," his Finns Party isn't exactly known for its compassion towards immigrants and on that note, we'll close with one last rather ominous quote from Soini:

“If the influx of illegal asylum seekers isn’t brought under control in Greece, or in other countries, that will cause national states to take matters into their own hands."