After Slow Economic Decline, Finland Might Be Exiting The Euro Zone

Next year, Finland’s parliament will take up and debate the issue of whether to quit the euro. Analysts predict that the debate will unlikely end the country’s membership of the euro, but it does highlight the fact that Finns are very dissatisfied with the state of their country’s economy.

The decision to discuss the country’s membership of the single currency follows a citizens’ petition that raised the 50,000 necessary signatures required to force the debate. The Finns’ petition appears to the be the first of its kind in any country that is part of the 19-member euro zone.

Maija-Leena Paavola, who helps push legislation through parliament, stated that, “There will be signature checks early next year and a parliamentary debate will be held in the following months.”

The petition – which is still gathering signatures – demands a referendum debate regarding membership of the euro, but it will only go forward if parliament supports the idea.

Despite the obvious dissatisfaction with their economy, a poll taken earlier this month showed 64% of Finns supported the common currency, although that support is down from 69% one year ago.

Finland is presently performing worse than any other euro zone country.

Some Finns believe the country’s economy will improve if it returned to the markka currency and also regained the freedom and ability to set its own interest rates. In support of this argument, they pointed to nearby Sweden, which is outside the euro. The markka could then devalue itself against the euro, thereby making Finnish exports comparatively less expensive.

Paavo Vayrynen, a Finnish member of the European Parliament who launched the initiative, stated that, “Since 2008 the Swedish economy has grown by 8%, while ours has shrunk by 6%.”

Vayrynen, who is known for his opposition to greater integration with Europe further added that, “Now is a good time to have a wider debate whether we should continue in the euro zone or not.”

Finland’s government is currently struggling to balance finances and improve its exports through “internal devaluation,” by cutting workers’ holidays and other benefits.

The governing coalition said in its government program that, “Finland is committed as a member of Economic and Monetary Union to promote the stability of the euro area.”

Vesa Kanniainen, an economic professor at Helsinki University, opined that, “The exit would not be easy, but it must be viewed from the point of view of how it would help gross domestic product to grow.”

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