By Antti Kerppola
HELSINKI (MNI) – A plan by Eurozone leaders to require only a
super-majority rather than unanimity on decisions by its future bailout
fund, the European Stability Mechanism, has hit a snag in the
Euro-sceptical reality of Finnish politics.
Since last week’s EU summit, at which leaders announced the amended
decision-making rule for the ESM, members of Finland’s coalition
government have been sending conflicting signals, and Helsinki has
expressed reservations to its European colleagues about eliminating the
requirement of unanimity for ESM decisions.
The ESM, which will replace the current European Financial
Stability Facility (EFSF), was originally slated to begin operations in
June 2013. The leaders agreed last week, as part of their answer to the
Eurozone debt crisis, to move the ESM’s launch date up a year to June
They also agreed, in order to avoid decision-making paralysis, to
allow urgent ESM decisions to be taken by countries holding 85% of
subscribed capital. This gives an effective veto to Germany, France and
Italy. Under the previous plan, which called for unanimity in all
decisions, any country regardless of its size could have vetoed action
by the ESM.
Finland’s new sceptical tone is largely the result of parliamentary
elections last April in which the nationalist, anti-Europe True Finns
party made a significant breakthrough, taking 39 of the 200 seats,
compared with just 5 in the outgoing parliament.
The new coalition government was the result of a “rainbow alliance”
among six groups, including both right-leaning and left-leaning parties.
It is led by the National Coalition party, which won the most seats in
parliament. True Finns are now one of the two main opposition parties,
and are wielding their euro-sceptic influence.
Since the new parliament was installed and the government formed,
all of the parliamentary groups have been tip-toeing around the heated
bailout fund issue and other EU-debates. The formerly pro-EU Social
Democrats, which are in the governing coalition, have taken a notably
less sympathetic position towards Brussels.
Throwing oil onto the ESM fire, the parliament’s Constitutional
Committee declared last Thursday that the proposed 85% super-majority
voting rule for the future bailout fund was incompatible with Finnish
However, some experts have cast doubt on this argument, noting that
Finland has not insisted on a unanimity clause with regard to the
International Monetary Fund, where decisions are also made by majority
voting. Tuomas Ojanen, a professor of constitutional law at the
University of Helsinki, argued that “majority decisions are not per se
National Coalition, the leading party of the ruling government
alliance, would probably accept a majority voting system for the ESM.
But the Social Democrats, the second biggest governing party, rejects
it. Jutta Urpilainen, chairwoman of the Social Democratic Party, who is
Finland’s finance minister, said flatly that unless unanimity is
required for ESM decisions, “Finland won’t participate in the ESM
Katainen sought to downplay the conflict, saying, “Finland wishes
to be a plenipotentiary member of the EU and this is why we are now
working so that everyone can accept each other’s important principles.”
He added: “The ESM is a very important issue for the stability of the
Euro. There is no ambiguity concerning this in the [Finnish]
However, the conflict between the two top coalition parties is well
known in Helsinki. Monday’s edition of Helsingin Sanomat, the leading
daily newspaper in Finland, argues that the two parties have totally
different approaches to the question and that Social Democrats believe
it is possible for Finland to stay out of the ESM.
Finland’s Foreign Trade Minister Alexander Stubb sought to clarify
the situation in an interview over the weekend with YLE TV1, taking a
hard line. “Finland will demand unanimity in ESM issues in the future,”
he said. “The EU has always found solutions to such situations. It is
hard to say what the solution would be. Let’s contemplate this in peace
and think about whether it is compatible with the Finnish constitution.”
Stubb, who also holds a doctoral degree in European Union
relations, argued that Finland’s new, harder position with regard to
Brussels is now a reality.
In recent months, this new, stiffer stance in Helsinki has resulted
in a Finnish demand for collateral on contributions to a Greek bailout
plan, and in the country’s insistence that private creditors accept
steep haircuts on Greek sovereign debt.
But Finland’s hardline has also come with a price. In exchange for
collateral for Greek bailout money, it became the only country that will
be required to pay in its entire share of ESM capital, amounting to E1.4
billion, up front when the new fund is launched.
“One should not be too absolute in its positions, especially if it
is a smaller state” Stubb said.
Although the situation with regard to ESM voting is not entirely
clear, there is some political will to find a mutually acceptable
solution. In his latest interview on Sunday, Katainen demanded that
every Eurozone nation take part in the ESM. However, to mollify the
opposition, particularly the True Finns, and take away some of their
political ammunition, the Finnish government is seeking modifications to
the final accord.