After more than 20 EU final crisis summits and hundreds of billions of euros later, there is still no solution in sight to the European crisis. The current bailout mechanisms are obviously not working. The debt burdens are not decreasing – they are increasing. Greece’s debt today, after two bailouts and the largest debt default in history, is larger than it was in the beginning.
Bailouts do not support average Europeans. In the crisis countries they are likely to be unemployed with plummeting standard of living. In the paying countries, they are being burdened with enormous liabilities ensuring that their productivity disappears too.
The only thing that the bailouts are achieving is direct transfer – taking the problem away from the banks and placing it squarely onto the shoulders of the European taxpayer. The only ones who are benefitting are the politically well-connected banks and speculators who are rapidly cutting their exposures and keeping the profits from their erroneous risk taking. Heads I win, tails, well I win little less. For the productive economy the bailouts are achieving precious little.
This is the main reason why The Finns Party and I have steadfastly stood against the bailout madness right from the beginning. This logic is getting resonance, not only among the economists. One only needs to look at the demonstrations in Southern Europe and polls to see the deep disapproval. In Finland, in the recent national poll, 66 per cent of our citizens opposed further bailouts while only 22% were in favour.
Indeed, I am often asked about the bailouts’ legal, moral, realpolitik, and economic facets.
As a legal question, not only did we not commit to bailouts, but the treaties under which we joined explicitly prohibit any fiscal bailouts between nations – and the central bank from financing governments. Finland is also one of the very few countries that always lived within the budget deficit and maximum debt rules, throughout the Euro’s history. The irony is that by agreeing to these bailouts, we are also likely to break the founding principles.
As also our President has noted, the moral consequences are even more important. It is often assumed that this is rich North helping poor South. Unfortunately, this is not true. Whilst the northern governments appear in better shape than their southern counterparts, at the household level the case is often the opposite. For example, the household net financial wealth in Finland is actually below that of all the crisis countries. Similarly, the household disposable income has been lower (excluding Portugal). The reason is simple: in Finland, the overall tax burden is 43% of GDP, whereas in Greece, Portugal, Spain, and Greece it is over 10 per cent lower. Indeed, one could claim that the European countries are following two different business models: Some countries favour high taxes, low borrowing, and poorer households while others prefer lower taxes, higher government borrowing, but wealthier households. It is increasingly difficult to justify to the Finnish tax payers why they should pay their high taxes twice.
Similarly, there are the uglier, realpolitik aspects of bailouts. Clearly, the main justification for the European “common” bailout program arises from the banking sector exposure. Bank risk toward Greece, Ireland, Portugal, Spain, and Italy was €570 billion for Germany, €590 billion for France, and €250 billion for the Netherlands at the beginning of the crisis (BIS). Thus, while it may be tempting for Germany, France, and the Netherlands to try to bail out their banks through the common mechanism rather than directly, this clearly is not the case for everyone. For example, Finland’s banking exposure was less than €2 billion, or 0.12% of the total.
The same applies to trade. In Finland, less than 15% of all our exports go to the Euro countries outside Germany and the Netherlands. We export more to Kazakhstan and Bangladesh than either to Portugal, Greece, or Ireland. It is thus hard to rationalise that the bailout billions are used to save domestic jobs.
All this would probably be somehow tolerable if the mechanism was actually working. Unfortunately, it is not. As in any market economy, the only viable solution is the freedom to fail, not the continuous moral hazard. Restructuring is needed to make the debt levels sustainable. Banks and speculators must accept losses from their unsound investments. Insolvent banks must be either recapitalized or shut down.
Timo Soini
Bailouts do not support average Europeans. In the crisis countries they are likely to be unemployed with plummeting standard of living. In the paying countries, they are being burdened with enormous liabilities ensuring that their productivity disappears too.
The only thing that the bailouts are achieving is direct transfer – taking the problem away from the banks and placing it squarely onto the shoulders of the European taxpayer. The only ones who are benefitting are the politically well-connected banks and speculators who are rapidly cutting their exposures and keeping the profits from their erroneous risk taking. Heads I win, tails, well I win little less. For the productive economy the bailouts are achieving precious little.
This is the main reason why The Finns Party and I have steadfastly stood against the bailout madness right from the beginning. This logic is getting resonance, not only among the economists. One only needs to look at the demonstrations in Southern Europe and polls to see the deep disapproval. In Finland, in the recent national poll, 66 per cent of our citizens opposed further bailouts while only 22% were in favour.
Indeed, I am often asked about the bailouts’ legal, moral, realpolitik, and economic facets.
As a legal question, not only did we not commit to bailouts, but the treaties under which we joined explicitly prohibit any fiscal bailouts between nations – and the central bank from financing governments. Finland is also one of the very few countries that always lived within the budget deficit and maximum debt rules, throughout the Euro’s history. The irony is that by agreeing to these bailouts, we are also likely to break the founding principles.
As also our President has noted, the moral consequences are even more important. It is often assumed that this is rich North helping poor South. Unfortunately, this is not true. Whilst the northern governments appear in better shape than their southern counterparts, at the household level the case is often the opposite. For example, the household net financial wealth in Finland is actually below that of all the crisis countries. Similarly, the household disposable income has been lower (excluding Portugal). The reason is simple: in Finland, the overall tax burden is 43% of GDP, whereas in Greece, Portugal, Spain, and Greece it is over 10 per cent lower. Indeed, one could claim that the European countries are following two different business models: Some countries favour high taxes, low borrowing, and poorer households while others prefer lower taxes, higher government borrowing, but wealthier households. It is increasingly difficult to justify to the Finnish tax payers why they should pay their high taxes twice.
Similarly, there are the uglier, realpolitik aspects of bailouts. Clearly, the main justification for the European “common” bailout program arises from the banking sector exposure. Bank risk toward Greece, Ireland, Portugal, Spain, and Italy was €570 billion for Germany, €590 billion for France, and €250 billion for the Netherlands at the beginning of the crisis (BIS). Thus, while it may be tempting for Germany, France, and the Netherlands to try to bail out their banks through the common mechanism rather than directly, this clearly is not the case for everyone. For example, Finland’s banking exposure was less than €2 billion, or 0.12% of the total.
The same applies to trade. In Finland, less than 15% of all our exports go to the Euro countries outside Germany and the Netherlands. We export more to Kazakhstan and Bangladesh than either to Portugal, Greece, or Ireland. It is thus hard to rationalise that the bailout billions are used to save domestic jobs.
All this would probably be somehow tolerable if the mechanism was actually working. Unfortunately, it is not. As in any market economy, the only viable solution is the freedom to fail, not the continuous moral hazard. Restructuring is needed to make the debt levels sustainable. Banks and speculators must accept losses from their unsound investments. Insolvent banks must be either recapitalized or shut down.
Timo Soini
Vastaukset 7
Vanhimmat
Olenkohan minä oikea suomalainen kun en ymmärrä tästä sanaakaan?
Ei susta ainakaan Perussuomalaiseksi ole, jos et ymmärrä Isä Soinin saarnasta mitään.
Suomennos; Rahat on mennyt etelänvetelän suon kautta Saksan, Ranskan ja Hollandin pankkejen palastamiseen.
"After more than 20 EU final crisis summits and hundreds of billions of euros later, there is still no solution in sight to the European crisis. "
Paskapuhetta! Akuutin kriisin leviämisvaara on huomattavasti pienempi nyt kuin 2010 kun tukutielle lähdettiin. Jo pelkästään tämän arvo on suurempi kuin nyt maksettu tuki, puhumattakaan odotettavissa olevista aika pienistä luottotappioista.
"In the paying countries, they are being burdened with enormous liabilities ensuring that their productivity disappears too."
Vielä emme ole maksaneet mitään. Olemme vain saaneet korkotuloja. Eivät nämä rahat ole pois keneltäkään. Ei Suomi olisi itselleen noita lainoja nostanut, koska silloin oma velkaisuus nousisi liiaksi. Soini hämää nyt oikein urakalla. Ja täysin tietoisesti!
"The irony is that by agreeing to these bailouts, we are also likely to break the founding principles."
Törkeä väite! Suomella saattaa olla kivinen tie edessään. Ei ehkä Kriekan tie, mutta tie jolla rikotaan EMU-kriteerejä kuitenkin. Eikä silllä ole mitään tekemistä eurotukien kanssa. Meidän ongelmat johtuvat metsäteollisuuden ja ITC-sektorin erittäin nopealla heikentymisestä, ja Euroopan hankalimmasta ikärakenteestamme. Mahdolliset tulevat luottotappiot eurotuista ovat hyttysen pieru siihen verrattuna. Eurotuet ovat itse asiassa keino elvyttää omaa vientiämme!
Mutta nyt pitäisi vihdoin päästä käsiksi varsinaioseen talouden tukahduttajaan - pankkien roksalainojen järjestelyyn.
"The only thing that the bailouts are achieving is direct transfer – taking the problem away from the banks and placing it squarely onto the shoulders of the European taxpayer."
Törkeää populsimia. Kuinka tyhminä hän meitä oikein pitää?? Pankit ovat meidän rahoittamia ja meitä rahoittavia. Pankkijärjestelmä hoitaa meidän laskuliikenteemme, ja tasaa meidän tulot ja menot. Jos ME emme pidä järjetselmäämme pystyssä ME kärsimme siitä. Ei ole olemassa mitään ulkopuolisia ilkeitä tahoja jotka ovat ongelmamme aiheuttaneet tai joilla olisi rahaa tai kiinnostutta järjestelmämme pelastamiseen.
Keitäkölhän Soini mahtaa tarkoittaa sanalla "banks" (taking the problem away from the banks)?
En jaksa lukea enempää. Tulee vain paha olo siitä miten maanmies voi petkuttaa omiaan, ja varsinkin siitä ettei jengillä ole hoksottimia ymmärtää että heitä viedään kuin vierasta sikaa. Eihän Soini moista kirjoittelisi ellei luottaisi kansalaisten tyhmyyteen.
"As in any market economy, the only viable solution is the freedom to fail, not the continuous moral hazard."
On kohtuullisen merkillistä että juuri suomalainen poliitikko väittää jotain tuollaista. Jos tuota olisi kokeiltu Suomessa runsaat 20 vuotta sitten, olisimme huomattavastii köyhempiä tänään. Onneksi kukaan, Soini mukaanlukien, ei silloin ollut tuollaista vaatimassa.
Olisimme ollet IMF:n sylissä alta aikayksikön!
osako soini venättä onse viisa mies tuo puh.hotja.vai on se rakskankeili
ansanedustaja ja suuren valiokunnan jäsen Kimmo Sasi (kok.) muistuttaa, että Kreikalle on laadittu ensin yksi apupaketti, ja kun se ei riittänyt laadittiin toinenkin apupaketti.
Sasi sanoo, että Kreikka ei ole tehokkaasti pannut täytäntöön avun ehtona asetettuja velvoitteita, mikä osaltaan on johtanut siihen että paineita kolmannenkin apupaketin laatimiseen on syntynyt.
– Jos siihen joudutaan, niin täytyy sanoa, että Kreikan uskottavuus sopijaosapuolena alkaa olla erittäin huono. Lisäksi Kreikan sisäinen tilanne on sillä tavalla hankala, että minun uskoni siihen, että näillä apupaketeilla Kreikka saadaan kuntoon, on aika huono, Sasi sanoo Taloussanomille.
– Tällöin tietysti Kreikan astuminen ulos eurosta antaisi mahdollisuuksia Kreikan taloudelle sopeutua vallitsevaan taloustilanteeseen suhteellisen nopeastikin, vaikkakin todella vaikean tien kautta.
Sasi arvelee, että jäljelle jäävän euroryhmän kurillekin voisi olla hyväksi, jos Kreikan tapaus toimisi esimerkkinä siitä kuinka käy, jos ei toimita sääntöjen mukaan ja ylipäätään tullaan joukkoon mukaan väärin tiedoin.