Good for Germany, good for Finland?

Was temporary Grexit the Finnish government’s default position as last weekend’s negotiations started on Greece’s third bailout in Brussels?

There appears to be more than one truth out about this. The question is important, since it is indicative of the Finnish government’s wider EU-strategy. To advocate the break-up of the eurozone without a German-style long term vision of a gradually deepening and federalizing EU, places any member state  easily in the ultra-EU-skeptic camp.

It is also the more pressing since Finland today has a government coalition led by the Centre Party, which in 1998 opposed Finland’s eurozone membership. In 1994 many of its MPs voted against Finland’s joining the  EU, despite a positive referendum mere weeks before. It also contains pro-EU politicians, such as ex-commissioner Olli Rehn, which means that EU-policy is a potentially disruptive issue for the party.

The second party in the coalition is the populist, anti-immigration and anti-EU Perussuomalaiset. It has views on the EU that resemble  those of UKIP in Britain. It is vehemently against any further integration in the EU beyond free trade. It does not, however, push for Finland’s leaving the EU.

Both the Centre Party and the Perussuomalaiset are also against Finland’s NATO-membership. In this case they are classically isolationist. Both believe strongly in Finland’s independent defence capacity and the ability to withstand Russian pressure, if need be.

The third government party is the Coalition Party, a centre-right conservative party. Led by Alexander Stubb, it is both strongly pro-EU and pro-NATO. With these views, it is an important balancing force in the government, and finds allies among the pro-Europeans in the Centre Party.

But the internal balance of the government’s EU-views appears fluid, and therefore the policy positions it takes prior to EU-summits gives us important information where the balance at any given moment is.

This far the government has been notably pragmatic in EU-issues. Not enthusastic, but not overtly critical either in most EU-policy areas. The moment of truth, however, is what to do with Greece.

What do we know of the Finnish position on the temporary Grexit plan?

Finance Minister Alexander Stubb says that a temporary Grexit was but one alternative considered by the Finnish government at the start of the negotiations. Be that as it may, the Parliament’s EU Affairs committee minutes tell a different story. According to the documents, Finland responded to Greece’s offer with supporting the temporary Grexit plan.

As is well known, the plan originated from Germany. By showing the door to the Greeks, Finance Minister Wolfgang Schäuble generated significant pressure to the Greek government but also to the insitutions, the infamous troika, and all other eurozone countries to exact more stringent conditions for the bailout. Germany’s uncompromising stance came as a surprise at least to the French and the Italians, who had hoped  for a more lenient solution.

What happened next, is also well known. But what is not as clear, is what happened behind the scenes in various EU-capitals.

Most EU-countries do not have such transparency as Finland has in its EU-policy. As the Finnish government must clear the outlines of its EU-policies in advance in the Parliament’s EU-Affairs committee, we usually know what those are. Due to the exceptional circumstances of last week’s negotiations, the Finnish government kept the minutes and its positions confidential for almost a week (sic). In this way it behaved in the same way most other EU-countries behave, with the exception that their confidential position papers will be declassified in most cases in the 2040s.

We therefore know that the German Shäuble-plan became Finnish government policy more or less immediately as it reached Helsinki. It is likely that many other Northern and Eastern eurozone countries did the same. The difference is that Finland and the Netherlands have done much more of the talking and the dirty work around eurogroup tables.

What this tells about Finnish EU-policy is simply that it is willing to support Germany even when that support contains significant political, economic and reputational risks. But this probably applies only to German positions that are critical for increasing joint liabilities in the eurozone.

It is unclear where the limits of this German-Finnish understanding or an alliance are, and how explicitly the terms of the alliance have been discussed between leaders and top-officials between the countries.

We know what Germany gains from it: allies in the coalition of the willing in its battle against the spendrift southerners in the eurozone.

Finland’s gains are in the realization of its own goals, that at least in the overall handling of the Greek crisis are well aligned with Germany.

But outside the coalition of the willing, Finland also gains a reputation of being a critic of European integration as a reality as well as an idea. That reputation may be unfair, but given the composition of the government and the gravity of the single issue of Greece’s eurozone membership, it is just what it is.

Furthermore, this is a reputation that is a wholly different story for a small, peripheral latecomer in EU-integration, than it is a for an old European great power, that has a more or less unblemished history of contibution to the European project since the first plans saw the light of day in the 1940s.

An old great power such as the Netherlands.

Leave a Reply

Your email address will not be published. Required fields are marked *