On the state of the EU/ Euro –debate in Finland

October 20, 2015

I prepared this country report as a background paper for a seminar on “Left strategies for the future of Europe following the dictates against Greece”, organized by the European Attac network in cooperation with the Rosa Luxemburg Foundation, to be held in Paris from 23 to 25 Oct 2015. This blog version is slightly longer than the original.

The social democratic era in Finland lasted until the financial crisis of 1990-93, but the main turn was preceded by (i) deregulation in product markets and liberalization of financial markets in the mid-1980s and (ii) by the first government led by the conservatives in 43 years. Thus the transformation started already in the 1980s.

The deep depression of the early 1990s had profound effects both on (transnational) power relations and national politics. The GDP declined by 13 % and unemployment rose from 3,5 % to 18,9 %. The response of Esko Aho’s right-wing government was harsh austerity coupled with devaluation and the bailing out of banks. It was during this period that Finland applied for EU membership. Only two minor parties openly opposed the membership, while the Greens and the Left Alliance were deeply divided on the issue. In the October 1994 referendum, 56,89% voted in favour. The Finnish referendum was followed by a tighter referendum in Sweden (52.3% in favour) and Norway (52.2% against membership). There were speculations about the possible and likely effects of a reversed order of referenda.

The period 1995 to 2007 – with gradual economic recovery built on export-led growth – can be characterized as the consolidation of neoliberalism in Finland. Wide coalition governments continued to privatize and cut welfare, while implementing new neoliberal systems of governance across public administration and society. In terms of identity politics, the country was often represented as “model pupil” of the EU. Global rankings suggested that Finland has the best educational system in the world (a result of the reforms of the previous era) and that Finland is among the top countries in terms of “competitiveness” (combining still functioning but eroding social systems and neoliberal orientation). In these years inequalities rose more rapidly than in any other OECD country (Gini-index jumped from 22 to nearly 30).

A couple of dissidents from the Centre Party and the Left did well in the European Parliament elections; and a few public intellectuals managed to make some critical interventions to the discussions about the EU and its future. Yet the anti-EU and alter-EU movements remained weak until the global financial crisis and its second phase, the Euro crisis. Economic downturn and increasing competitiveness, uncertainties and insecurities in everyday life, followed by the Euro crisis, paved the way for the rise of the nationalist-populist Finns Party. It gained 19.05% of the votes in the 2011 parliamentary elections and 17.65% in 2015. Other parties, most notably the Social Democrats, started to revise their policies towards a more nationalist direction. As a result, the “model pupil” (Finland) has become increasingly self-assertive, often resulting in positions that are even more hardline than those of the German Christian Democrats, the ECB, or the Commission. Austerity at home has had devastating consequences to the Finnish economy and social fabric.

Most of the current criticism directed against the EU stem from nationalist considerations. The Greens and the Left Alliance, however, have a reformist stance vis-à-vis the EU. The latter published an ambitious transformative platform in the European Parliament elections in spring 2014, contributing to a minor electoral victory. All this means that in 2015 there is much more diversity in positions regarding the EU in general and the Euro in particular than at any time since the 1994 referendum. ATTAC Finland has not been a particularly active party in these debates, but in general sides with the Greens and the Left.

What is also noteworthy is that the ruling Centre Party is split on the future of the Euro. MEP Paavo Väyrynen is currently collecting signatures for a citizens’ initiative to organize a referendum about whether Finland should stay in the Euro or not. Väyrynen’s initiative will not pass in the current parliament, yet it is indicative of a changing tide, as also parts of neoliberal/libertarian right have started to reconsider the Euro.

Moreover, also the Left Alliance 2014 platform states: “If the crisis in the Eurozone or, more generally, problems of the Euro cannot be solved in a sustainable manner, a referendum should be organized in each member country and the euro should be dismantled in a controlled way.”

For the Left, the basic idea of a referendum would be to politicize the prevailing institutional arrangements, in order to facilitate institutional transformations in the EU and also globally. Should a return to a national currency prove popular, it must be considered a temporal solution at best and called something else than markka, for instance solidi (from the Latin words solidum and solidus, which form the basis of “solidarity”).

Heikki Patomäki