Finland: leader populist party pushes for departure from Euro

7 years ago - Published in Finance, Fundamental Analysis

Sampo Terho, a former member of the European Parliament and one of the top figures of the new populist and Eurosceptic party called Peerussuomalaiset (the True Finns), is pushing for Finland’s exit from the Eurozone, an outcome he considers inevitable.

Terho kicked off his party leadership campaign on Friday, telling a press conference that it was hard for Finland to keep its exports competitive because of its euro membership. "The only way to sustain our competitiveness is internal devaluation, which we carried out," he said, referring to a hard-fought labor reform that sparked anti-government demonstrations and strikes in 2015.

"The other option, if looking forward to the 2020s, 2030s and 2040s, is to return to our own currency … When we take this long look, that option seems possible, even likely," Terho said.

Terho is the current frontrunner in his bid for Finn party chairmanship in the upcoming party convention to be held in June. The Finn party is presently the junior partner in the center-right government led by Prime Minister Juha Sipila, with Finn’s current leader, Timo Soini, in the role of foreign minister.

Within the ranks of Perussuomalaiset, calls for a “Fixit” (coined to mimic “Brexit”) as well as a disentanglement from the single euro currency are growing louder. Terho’s chief competitor for leadership in the party comes from Jussi Halla-Aho, a member of the European Parliament (MEP), a Eurosceptic who believes that Europe is heading towards a disaster because of unchecked immigration. In the long term, he estimated, it is possible, even likely, that Finland returns to its own currency. The Finns Party will remain the only EU-critical party in Finland, added Terho.

Finland is the only country in the Nordic Community (also comprising Sweden, Norway, Denmark, and Iceland) to be a member of the Eurozone. Notably, it is also the only Nordic country facing severe economic and social problems, including weak growth after years of recession, unemployment well higher than in surrounding countries, and social tensions. According to a survey last year, 68 percent of Finnish citizens support EU membership.

Last December, a petition to hold a referendum on whether Finland should leave the European Union failed to attract enough signatures by the deadline on Wednesday to move the proposal to parliament.

The "Fixit" petition was launched in June 2016 by the youth organization of the country's co-ruling, eurosceptic Finns party in the wake of Britain's referendum vote to leave the EU. The proposal gathered less than 34,000 supporters in six months. The required number was 50,000.