Finland’s example is giving Swedes cause to mull over joining the eurozone, writes David Ibison in the Financial Times.
“Sweden, like Finland, is an EU member and both economies have moved in virtual lockstep in the past few years as intra-EU trade has increased. Erkki Liikanen, governor of the Bank of Finland, says: ‘The question remains of why Sweden and Finland have performed basically the same despite having different monetary regimes. The answer is that they are both open economies that encourage competition, both have prudent.’”
“Now the global economic crisis is exposing the difference between Sweden and Finland stemming from their positions on the euro.
Johnny Munkhammar, research director at the European Enterprise Institute, a Brussels-based non-profit group, says: ‘The euro provides more stability in times of crises. The krona fluctuates in an exaggerated way, simply because it is too small. The fluctuations make foreign trade risky and difficult, especially for smaller businesses.’”
“On the Finnish side, currency stability remains the main benefit of membership, protecting the economy against unforeseen economic shocks from elsewhere in the world.”
“There is also a political element. Liikanen makes it perfectly clear that Finland, as a small country, saw the eurozone in geo-strategic as well as economic terms. ‘Finland wants to be around all the tables where decisions are being made, so it was both economics and politics,’ he says.”
FINANCIAL TIMES 19 December.
DAVID IBISON
Lehtikuva - Timo Jaakonaho
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