---
title: "An Alternative to the Euro: the ECU-2 Basket — Sami Miettinen and Juhana Vartiainen on Puheenaihe"
titleOriginal: "EU: Vaihtoehto eurolle, ECU-2-kori (Juhana Vartiainen & Sami Miettinen) | Puheenaihe 131"
description: "Sami Miettinen puts the ECU-2 proposal — reversing into the euro's own construction by reintroducing national currencies as weights in a basket — to MP and economist Juhana Vartiainen, who does not buy it. A genuine disagreement between two economists on whether Finland's problem is monetary or domestic, covering Target2, federation without transfers, fiscal dominance and what the ECB did to Greece in 2015."
format: "podcast"
show: "Puheenaihe"
episode: "131"
hosts: ["Puheenaihe"]
date: 2020-11-24
duration: "1:15:08"
language: "fi"
original: https://www.youtube.com/watch?v=OSBxL8xGqM8
relatedEpisode: https://www.neuvottelija.com/podcast/episodes/ep347-euro-ecu2-hamilton-sami-miettinen/
canonical: https://www.neuvottelija.com/media/puheenaihe-131-ecu-2-basket/
---

# An Alternative to the Euro: the ECU-2 Basket — Sami Miettinen and Juhana Vartiainen on Puheenaihe

This is the episode where Sami Miettinen's ECU-2 proposal meets a serious opponent.
**Puheenaihe** put him opposite Juhana Vartiainen — economist, MP, and unpersuaded — and
the result is an argument rather than an interview.

The proposal, first published as an appendix to Libera's 2014 *Euron tulevaisuus, Suomen
vaihtoehdot*, is to reverse into the euro's own construction. Twelve countries entered
by first tying their national currencies to the European Currency Unit basket and then
converting at a fixed rate; ECU-2 would run that backwards — reintroduce national
currencies as parallel money, define the euro juridically as the weighted sum of them,
and let the weights move. Today the euro has no juridical definition at all.

Vartiainen's objection is direct and he presses it repeatedly: what is the added value?
If the willingness to tax German surpluses and redistribute them does not exist, no
currency architecture creates it — the binding constraint is political will, not
plumbing. And on Finland specifically he pushes back on the premise. Finland is a
stronger-than-average euro country, and its trouble adjusting to low inflation is
domestic: Germany ended incomes policy and did the Hartz reforms, so treating Finnish
rigidity as a given and blaming the currency puts domestic problems on the monetary
tab.

Where they converge is more interesting than where they differ. Both accept that the
basket's manager would need the crisis toolkit — an EMF role, the power to force debt
restructuring — and both are wary of a federation understood as a large shared public
budget. The better reading of federalism, Vartiainen argues via Elina Lepomäki, is
Switzerland: sharply bounded responsibilities and taxing rights. Sami's version of the
worry is about scale and capture — systems designed around large countries' interests,
with Finland holding two per cent of the vote, and an EU-wide social security that would
pull Finnish benefits down to meet everyone else.

The final third gets speculative in a way both flag as speculative: Target2 balances and
what happens to them if Italy leaves, whether the recovery fund really stays one-off,
whether over €200bn of borrowing eventually produces demand the supply side cannot meet,
and whether the ECB can force restructuring or ends up in fiscal dominance. Sami's
evidence is Greece in 2015 — emergency liquidity switched off, Tsipras and Varoufakis
made to take the package — which makes the ECB an extremely political body. Vartiainen's
counter is the one that closes the episode: the microeconomic benefits of a single
currency are large and unglamorous, and they show up every time an ordinary person prices
one decision against another across a border.

## Chapters

- **00:00** — Is there an alternative to the euro that does not break it up
- **03:00** — Defining the euro juridically as a basket; floating or fixed within a band
- **06:00** — Vartiainen: what is the added value over national currencies
- **09:00** — The binding constraint is political will, not architecture
- **12:00** — Libera's 2014 book, and whether Finland is a weak euro country
- **15:00** — Adjusting to low inflation is a domestic problem
- **18:00** — Germany's Hartz reforms and the end of incomes policy
- **21:00** — Automatic counter-cyclicality already sits in the public finances
- **24:00** — Dornbusch overshooting, and remembering Pentti Kouri
- **27:00** — Target2 surpluses as an indirect claim
- **30:00** — The basket manager would need the EMF role and restructuring powers
- **33:00** — Reform the labour market inside the euro; Denmark's pegged krone
- **36:00** — Federation without transfers: Switzerland as the model
- **39:00** — A European army, and Finland's two per cent
- **42:00** — Systems tailored to large countries, and EU-wide social security
- **45:00** — Migration into an ageing continent; what Target2 actually is
- **48:00** — If Italy left, who settles the balance
- **51:00** — The recovery fund as a Keynesian move in a liquidity trap
- **54:00** — Would Finland become a larger net payer
- **57:00** — Centralising power is itself a risk
- **60:00** — Small reforms, and the EU as a relative game
- **63:00** — Public demand outrunning supply, and inflation expectations coming loose
- **66:00** — Fiscal dominance, or can the ECB force restructuring
- **69:00** — Greece 2015: emergency liquidity as a political instrument
- **72:00** — The microeconomic case for one currency

**The recording lives on Puheenaihe's own channel and they own it.** This page is a record
of the appearance and a pointer to the original, not a copy of it. The episode carries no
published chapter marks; the titles above are derived from the recording.

Sami set out the same proposal on his own channel, at much shorter length, in
[Euro, ECU2 and Hamilton](https://www.neuvottelija.com/podcast/episodes/ep347-euro-ecu2-hamilton-sami-miettinen/),
and the underlying monetary argument runs through
[Puheenaihe 44 on the international monetary system](/media/puheenaihe-44-international-monetary-system/).

Original recording (Puheenaihe): https://www.youtube.com/watch?v=OSBxL8xGqM8

From the same session: https://www.neuvottelija.com/podcast/episodes/ep347-euro-ecu2-hamilton-sami-miettinen/

---

Cite as: Sami Miettinen, guest on Puheenaihe 131 — An Alternative to the Euro: the ECU-2 Basket — Sami Miettinen and Juhana Vartiainen on Puheenaihe, 2020-11-24, https://www.youtube.com/watch?v=OSBxL8xGqM8. Record: https://www.neuvottelija.com/media/puheenaihe-131-ecu-2-basket/.