Whither Finland?

Last week I was asked by an international audience to give my assessment whether a change in Finland’s EU-policy would be imminent following the results of the recent parliamentary elections.

This is a valid question since a party known for its lukewarm views towards the EU, the Centre Party, won the elections, and will form the next government. Second in the polls and a possible coalition partner is Perussuomalaiset (sorry, but the name cannot be properly translated into English  without sounding offensive), which is famous for its strong anti-EU views.

My answer was that despite the election results I did not foresee a significant change in Finland’s traditional pragmatism in its EU-policy. This was due to how the next prime minister, Juha Sipilä, has underlined his fundamentally pro-European beliefs. While he does not believe in deepening the EU towards a political union, Sipilä has avoided strong vocabulary in EU issues.

Neither does he seem to entertain any delusions of grandeur in what a small member state can achieve in the EU against the will of others. My understanding also was that he has been briefed on the reasons why Finland has in the past been able to exert disproportionate influence in EU decision-making despite its small size and number of votes.

I did qualify my answer somewhat by saying that Finland will in the future be mostly pragmatic, often passive and occasionally unpredictable partner in the EU. Instead of adopting the union – or the ‘community’ – view in the areas it wants to have influence, it may also assume a more national view in many issues.

As it would be almost certain to loose what little influence it has in EU-affairs by adopting this stance, the outcome would probably be a much less proactive and passive Finland around EU-negotiation tables. Hence Finland would cease to be the role model it has been for other small EU-states in maximising its influence.

By saying the above I was certain I would be proven wrong by events.

That does not seem to be the case.

The first indications we have on Juha Sipilä’s thinking show that a much bigger change may be happening. Finland may be adopting a position alike to that of Denmark in the 1980s in NATO (the famous footnote policy) and in the EU in the 1990s (its opt-out policy).

The evidence can be found in the ongoing government formation negotiations. Juha Sipilä has asked prospective coalition partners to agree or not to agree with an outline of eurozone policy that is probably the most defensive policy position this far spelled out by anyone on the governmental level in Finland.

What Sipilä writes is taken directly from a hawkish finance ministry memorandum outlining a kind of maximalist policy of withdrawal from many of the decisions taken during the course of the eurocrisis in the last few years.

The starting point is business as usual: Finland is opposed to increasing its  liabilities in the eurocrisis. The stress should be on the national level economic policy measures to restore the health of the eurozone economies. If trouble arises, investors should take the responsibility.

Given that the bail-outs have already been made, and the banking union contains the principle of investor’s bail-ins, this statement is odd. Also as the ESM is already in place, Sipilä’s insistence that bilateral loans to countries in crisis are out of the question, adds to the oddity.

However, this is mere warming up to the main policy goal which is basically to turn the EU clock back by five years.

Sipilä asks his would-be government parties to agree (or disagree) that Finland should seek actions to restore the no bail-out rule and abolish the steps already taken towards deepening of economic policy coordination in the eurozone.

There may be good reasons for such a policy change, who knows.

But to spell such defensive, yet ambitious goals out so explicitly in advance is certainly a novelty in Finnish EU-policy.

If the memorandum becomes government policy, Finland risks painting itself into a corner from where it may be difficult to have much influence. Such a position known in advance, other eurozone countries with different ideas may not have much interest in listening to what arguments  Finland may have.

And if they do, they still might find it easier just to bypass Finland altogether. Just as happened to Denmark in the 1980s and 1990s.

But as in all of my assessments, I am sure to be proven wrong by events.

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