I was interviewed in Frankfurter Allgemeine Zeitung about the Euro Crisis. They chose one writer from each Euro country to comment on the matter. Here’s my part as a PDF. (The three other parts of the series will be published in later issues.)
They made the interview during the Olympic Games so the thoughts on the Baltic Union are not a cry of support for our populist political leader Timo Soini who has since voiced similar thoughts. My German isn’t good enough to tell whether it’s clear that this is an idea for a culturally and historically more connected union, not a demand based on real politics.
Here’s some parts of the interview that was originally conducted in English:
I believe the Lehman Brothers collapse and the current Euro crisis are but symptoms of the wider problems in our economic system. After the collapse of the Soviet Union, the 90’s and the 2000’s saw a huge deregulation of banks and markets, undemocratization of governments and market-driven globalization. This allowed for commercial banks and investment banks to fuse into huge banking conglomerates which are too big to fail. When governments base all their decisions on what’s good for the economy, this means that in fact it’s the banks that are in charge, not governments.
One starting point for the crisis was in 2005, when Germany and France pushed the EU to adopt the Basel II recommendations, tying European banks’ and even the European Central Bank’s credit rating systems to the American credit rating cartel of Moody’s and S&P. At least in Finland it seems the question “Will this affect our influence in the EU?” has changed to “Will this affect our credit rating?”. Finnish media and politicians take an unhealthy pride in having AAA rating and look down on the countries who score worse. Having a private credit rating cartel dictate European economic policies is a bit like having a doping manufacturer decide on how to check the Olympic athletes for illegal substances.
The criticism against EU and the Euro has always been vocal, but it seems to gain new momentum now. So far it’s been mostly the conservatives and the nationalists who are against the monetary union, but now there’s also lots of doubts from the left and the right. The current coalition government consists of capitalists, socialists, social democrats, greens, Christians and the Swedish language party, and even though they’re officially for supporting Spain, their ranks seem to be falling apart.
The most common public opinion is that there are great problems with the Euro, because the “southern” countries have wide-spread corruption and even that the southern people are lazy. It’s seen as unfair that the honest, hard-working northerners like Finns and Germans have to carry more than their rightful share. This just goes to show how people in a complex situation are desperately looking for easy answers and guilty parties.
First of all, Germany has a much larger vested interest in the well-being of Spanish banks, since many of those banks are credited by German and French banks. From an economic perspective, it makes perfect sense for Germany to want to bail out their own banks. For Finns, the question is much more complicated, and mostly based on the idea that if the Euro fails, it will probably somehow negatively affect Finns, as well, maybe.
Also, at least according to the newspapers, Merkel’s government hasn’t had such an easy time in getting the Germans or even the Bundestag to approve bailing out banks with tax money, either.
Another factor is Finland’s very complex government coalition. When the government was formed a year ago, the large Social Democrat Party and the mid-sized Left Alliance were needed to make up a majority in the parliament. But they wouldn’t join the right-of-center National Coalition Party -lead government unless everyone agreed they would make the shareholders of the bailed-out banks responsible, as well. I think this was a good idea, since otherwise the shareholders would have made lots of profit without sharing none of the risks. In practice this has been problematic, as it means Finland has to go through special negotiations with each bailed-out country, and after the negotiations all the other countries might feel like they’re been cheated, if they don’t have a chance to get the same benefits as Finland has.
However, our (Social Democrat) Finance Minister Jutta Urpilainen has a very strong position at the moment, since she has just successfully negotiated the Spanish bail-out agreement, which seemed very unlikely at the time.
Whenever someone says there is no alternative, I become sceptical. Both Finnish and German governments have been very adamant in this policy of no alternatives, which for means that there is something for someone to gain by saying this. It’s possible they really do believe that one more bankrupt bank would result in a total chaos and a new Great Depression. But it’s equally likely that they are so closely connected to the banks that they have no choice except bail them out over and over again. It’s also possible that the situation is so complex even the politicians have no idea what would happen, and have chosen to avoid all risks, even though the bill seems to be quite high.
One thing I’m certainly glad the Bundestag did, is not allow the money to go to Spanish banks directly. Giving it to either the Spanish governments for them to help the banks, or having ECB control the bank regulation first seems like a step in the right direction.
I don’t know if “the idea of Europe” ever really did exist. I remember in the 90s when the European Community and European Union were advertized as carrying on the great Greek traditions of democracy and equality and so forth. All the brochures and early websites were full of pictures of Athenian temples and Olympian gods. In a way, the idea of Europe was suddenly and artificially created on top of Greek antiquity. And now there’s talk of throwing Greece out of the Union entirely.
So if we’re not building Europe on the traditions of ancient Greece, what are we building it on? There certainly have been movements and empires that have spanned large parts of Europe, but none that would even closely resemble the European Union. We’ve had the Roman Empire, the two Catholic Churches, the Ottoman Empire, the Renaissance, the Reformation, the Enlightenment, Napoleon’s Empire, and lots and lots of wars. Previously we were part of the West heroically standing against the Soviet Bloc, and now suddenly that Bloc makes up half of the Union. We’re a continent split apart religiously, politically, ethnically, linguistically, culturally, and don’t really have much in common, apart from the Euro.
If you want to talk about ideas, I think a Mediterranean Union and a Baltic Union would make much more sense, even though they’re tied together by sea instead of land. The Mediterranean Union would carry on the ideas of Greece/Roman classicism, the Catholic Churches, the Ottoman Empire and the Roman Empire. The Mediterranean Union could consist of Spain, France, Italy, Greece, Turkey, and possibly Northern African and Middle Eastern democracies. Austria, former Yugoslavia, the Ukraine, Bulgaria, and such countries might also be members. The Roman languages and Arabic would be the common languages.
The Baltic Union would be based around the tradition of the Hanseatic League, Protestantism, Norse and Slavic paganism, Secularism and the German, Danish, Russian and Swedish Empires. The member states of the Baltic Union would be all the Nordic, Baltic and Benelux countries, Poland, Germany, Czech, Russia and the UK. The common languages would be German, English and Russian.
Central European states would be welcome to join in, possibly some would want to split two ways.
The birth of the EU was in preventing yet another great war in Europe. I agree this is a lofty goal, and these two unions might easily fall into feuding. Strong economic and political ties would ensure this doesn’t happen.