The Markka and the Coming Federation | Tuomas Malinen | Neuvottelija 25

Summary

Tuomas Malinen of GnS Economics and Sami Miettinen revisit the three scenarios they set out in their book on the euro’s future six years earlier: zombification through the ECB’s balance sheet, a move to federation, and fragmentation of the euro area. Malinen reads the pandemic as a classic asymmetric shock being explained away as a symmetric one, and argues the EU has moved onto a path that breaches its own treaties in both the recovery fund and the ECB’s pandemic programme. The episode covers the Karlsruhe court’s deadline for the Bundesbank, Finland’s hidden contingent liabilities, and why a floating currency works as a countercyclical safety valve. It closes with Malinen’s pointed promise about leaving the euro and a scenario in which the recovery package fails in national parliaments.

Chapters

• 00:00 — A third appearance and the pandemic’s first real hit
• 02:30 — An asymmetric shock explained away as symmetric
• 05:00 — The book’s three scenarios six years on
• 07:30 — Malinen’s view that the EU has breached its own treaties
• 10:00 — The Karlsruhe deadline and a Bundesbank withdrawal
• 12:30 — Abandoning the capital key and PEPP as a direct credit line
• 15:00 — The 2012 Greek packages and whose banks were rescued
• 17:30 — Why non-euro countries are in it now that Britain has left
• 20:00 — Hidden contingent liabilities and export guarantees
• 22:30 — Federal development without a referendum
• 25:00 — How an exit would be prepared and the backup payment system
• 27:30 — Capital controls and cross-border contracts
• 30:00 — The nineties: a fixed rate and falling rates after floating
• 32:30 — Countercyclical floating and an example from the timber trade
• 35:00 — The Calmfors report and the Pekkarinen group’s mandate
• 37:30 — Malinen’s promise about the gains from leaving the euro
• 40:00 — Moral hazard and why public projects are not magic mills
• 42:30 — Malinen’s criticism of how the EU communicates
• 45:00 — What a year of extra time costs and US state debt levels
• 47:30 — 2011 as the decisive moment and the blocking minority that never formed
• 50:00 — A scenario in which the package fails in parliaments
• 52:30 — Currency unions have been unwound before

Watch

The recording lives on the Neuvottelija channel: Markka ja tuleva liittovaltio Tuomas Malinen #neuvottelija 25. A Finnish edition of this episode is published at www.neuvottelija.fi.