Business World

Friday 21 October 2016

Greece crisis: Why it's time for the debt-addled country to worry about the Finns

Mehreen Khan

Published 05/05/2015 | 09:58

A man holding a Greek national flag and a placard walks in Constitution (Syntagma) Square in Athens May 4, 2015. REUTERS/Alkis Konstantinidis
A man holding a Greek national flag and a placard walks in Constitution (Syntagma) Square in Athens May 4, 2015. REUTERS/Alkis Konstantinidis

The eurozone’s coterie of finance ministers is set to get a new face this week as Finland is set to formalise the details of its coalition government.

  • Go To

Following elections last month, in which the liberal Centre Party emerged as the largest party, prime minister elect, Juha Sipila is poised to announce who has made it into his cabinet after three weeks of political horse-trading.

As one of the single currency’s most ardent champions of austerity, the rest of the eurozone will be watching on with interest.

The candidates in line for the role of finance minister could help determine how far debt-stricken Greece will be pushed in its ill-tempered negotiations.

The favourite for the job is Timo Soini, leader of eurosceptic True Finns who first stormed into the limelight at the height of the eurozone’s woes in 2011.

Fiercely anti-immigration and a trenchant critic of creditor benevolence to southern countries, Mr Soini was left out of government over his resistance to Finnish involvement in the eurozone’s rescue programme for Portugal four years ago.

This time round, the True Finns - who have been rebranded as just The Finns - came in with nearly 18pc of the vote, and are likely to be brought into from the cold as the second largest party in parliament.

Traditionally, the post of finance minister has gone to the leader of the junior coalition partner.

In Mr Soini, a 52-year-old Millwall supporter who counts Nigel Farage among his closest political allies, the euro’s finance chiefs may well find themselves sitting around the table with a maverick who would put Greece’s much-maligned Yanis Varoufakis in the shade. 

Dubbed “Finland’s bear”, the populist leader has called Europe’s rescues of indebted states “pyramid schemes” and maintained that Greece should be ejected from the single currency.

He is resolutely opposed to Helsinki's involvement in any third bail-out which the Greeks are likely to need to retain their euro membership past June.

In the more immediate term, Mr Soini’s presence in Brussels is set to harden the Finns stance on Athens' bail-out conditions.

Speaking after the election, the True Finns leader intimated at a shift in towards the radical Left government of Athens, should he enter office.

“If the Finns go to government, I believe Finland's policy towards Greece will change. It will change for the better, because it can't get any worse,” said Mr Soini.

Despite only contributing less than 2pc to Greece’s current rescue package - compared to nearly 30pc from the bloc largest creditor Germany - Helsinki has been one of the most obstinate players in the Greek’s five-year bail-out drama.

But The Finns are hardly alone in their mistrust of another rescue deal for Greece. Even the IMF has hinted that it is willing to cut Greece loose.

Finland's new incumbent, whoever he may be, will immediately be thrown into the depths of Europe's latest crisis.

Having been locked in a three-month stalemate, the eurogroup of finance ministers are due discuss the Greek question at a vital meeting on May 11. Greece is due to repay a €770m loan to the International Monetary Fund the next day - an obligation which is set bleed the government's coffers dry if no new emergency cash is on the horizon.

Return of the 'Rehn of Terror'?

But even if Mr Soini takes an alternative cabinet role, his potential rival for the finance minister post would be no less of a stumbling block for the embattled Greeks.

Unlike his right-wing counterpart, the Centre Party’s Olli Rehn is a veteran of the Brussels circuit.

Serving as the EU’s economics tsar during the crisis-ridden years of 2009 to 2014, Mr Rehn became the face of eurozone austerity, as the architect of the single currency’s reinforced budget rules.

Eurozone veteran Olli Rehn is now a Finnish MP (AFP)

Despite being a committed europhile, the technocrat is unlikely to cede any ground to Greece’s demands for debt-relief.

For their part, Athens will hardly be relishing Mr Rehn’s return to office. It was under his term as Commissioner for Economic Affairs that the country bowed to the financial rescues which they claim loaded “the largest loan in human history on the weakest of shoulders".

The punishing austerity that accompanied the terms of the money, led to his term in office dubbed the “Rehn of Terror”.

Recognising the political mess that may await them in Brussels, both Mr Soini and Mr Rehn are thought to prefer the job of foreign minister. Whoever prevails, there is certain to be no love lost between them.

Speaking to the Telegraph four years ago, the True Finns leader castigated his liberal rival for criticising his party's anti-bail-out stance.

“Olli Rehn should do his job in Brussels and let Finnish people vote as they like," said Mr Soini. "I will go to Brussels and say 'Let's renegotiate'. We won't hand over more Finnish money to be burnt in the fire".

In another irony of the euro's convoluted debt drama, both men may now find themselves singing from the same hymn sheet.

Online Editors

Read More

Promoted articles

Editors Choice

Also in Business