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Friday, August 17, 2012 8:49 PM


"Break-Up Could Make EU Function Better" Says Finnish Foreign Minister; Finland Totally Committed to Euro, Yet Prepared Breakup


Yesterday, Finland's foreign minister said "Finland must face openly the possibility of a euro-break up"

“We have to face openly the possibility of a euro-break up,” said Erkki Tuomioja, the country’s veteran foreign minister and a member of the Social Democratic Party, one of six that make up the country’s coalition government.

“It is not something that anybody — even the True Finns [eurosceptic party] — are advocating in Finland, let alone the government. But we have to be prepared,” he told The Daily Telegraph.

“Our officials, like everybody else and like every general staff, have some sort of operational plan for any eventuality.

Mr Tuomioja’s intervention is the bluntest warning to date by a senior eurozone minister. As he discussed the crisis, the minister had a copy of the Economist on his desk. It had a picture of Angela Merkel, the German Chancellor, reading a fictitious report entitled “How to break up the euro”, with a caption: “Tempted, Angela?”

“This is what people are thinking about everywhere,” said Mr Tuomioja. “But there is a consensus that a eurozone break-up would cost more in the short-run or medium-run than managing the crisis.

“But let me add that the break-up of the euro does not mean the end of the European Union. It could make the EU function better,” he said.
What Consensus?

I have to wonder "what consensus" the Finnish foreign minister is referring to when he says "eurozone break-up would cost more in the short-run or medium-run than managing the crisis".

Consensus of nannycrats? Of politicians who bet their career on saving the euro? Of the Southern eurozone countries?

His second thought is far more believable: "Break-up could make EU function better".

Indeed nearly anything would be better than the eurocrats headed by Eurogroup president Jean-Claude Juncker and European Commission president Jose Barroso.

Finland Distances Itself From Tuomioja’s Comments

No doubt Tuomioja’s comments raised quite a stir because today Finland's European affairs minister stated Finland is totally committed to the euro.
Finland is totally committed to the euro, its European affairs minister said following comments from its foreign minister that the country was preparing for a break up of the single currency.

“Foreign minister Tuomioja’s statement in no way reflects the Finnish government position,” said Alexander Stubb, highlighting deep divisions within the coalition government. “Finland stands 100pc behind the euro,” the European affairs minister added.

He was speaking after foreign minister Erkki Tuomioja told The Daily Telegraph “we have to face openly the possibility of a euro-break up.”

Mr Tuomioja, a member of the coalition’s Social Democratic Party, said that Finnish officials had an “operational plan for any eventuality.”

Mr Stubb, a member of the centre-right Kokoomus Party, said his colleague had probably spoken in a personal capacity. “The government’s position is very clear: we stand pro-European and we stand to work, to improve the situation in the eurozone,” he said.
The positions of preparing for a break-up and being committed to the Euro are not mutually exclusive. However, the more talk there is of a break-up, the more that path becomes acceptable.

The point is moot however. The Problem in Europe is Arithmetic, Not Confidence. The Eurozone Cannot Possibly Survive Intact.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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