The Euro | Juhani Huopainen | Negotiator 72

Summary

This episode works through why the benefits of joining the euro have never been given a proper public debate in Finland. Huopainen takes apart the most common arguments for the euro’s superiority — low interest rates, exchange-rate stability and the disappearance of currency conversion costs — and shows that they are largely explained by factors other than the single currency. The central tension is that for a monetary union to work it would need either a federation or substantial internal reforms, yet in Finland neither is discussed openly. The conversation covers the recovery fund, Target 2, the role of central banks, the IMF’s conduct in Greece, and the unwillingness of experts and politicians to question the prevailing line. The conclusion is a demand that Finland define its own red lines and be capable of saying no when necessary, before a deepening transfer union is paid for by cutting living standards at home.

Chapters

• 00:00 — Opening
• 01:37 — The guest and a career around currency unions
• 02:24 — The euro has not been discussed enough
• 02:52 — Finland joined in a hurry, Sweden stayed to think
• 03:45 — Sweden has pulled ahead of Finland in growth
• 04:53 — The nineties lacked a many-voiced economic debate
• 06:20 — An open wager on proving the euro’s net benefits
• 08:09 — First claim: low interest rates
• 09:37 — Rates fell everywhere, not only in the euro area
• 10:07 — Second claim: stability and a fixed rate
• 11:21 — The IMF compared floating and fixed currencies
• 12:31 — Counter-cyclicality and the argument with Juhana Vartiainen
• 14:00 — Internal devaluation got the name “kiky”
• 15:45 — The 1991 Sorsa agreement collapsed on the unions
• 16:55 — Floating the markka and Rolf Kullberg’s position
• 17:47 — First you have to admit there is a problem
• 18:53 — The price of disagreeing in Finland
• 19:45 — Third claim: currency conversion costs vanished
• 21:04 — How the banks fleeced companies in the nineties
• 23:35 — Counterfactual studies give contradictory results
• 25:16 — MMT, monetary financing and its limits
• 27:27 — Central banks prevented the collapse — what now
• 29:00 — The recovery fund as federal debt
• 30:58 — The federation debate is systematically avoided
• 33:05 — Draghi’s Helsinki speech on transfers
• 35:05 — Parties should state their positions honestly
• 36:23 — Finland has no negotiating mandate and no cards
• 38:49 — The SDP has accepted joint liability and transfers
• 39:54 — Yellen’s global minimum tax
• 40:56 — The IMF tripled SDR allocations
• 42:38 — The IMF and the lie about Greek debt sustainability
• 43:45 — Political steering in the audit office’s reports
• 44:50 — The Greek haircut and the ECB’s sacred claims
• 46:49 — Those who talk of rules break the rules themselves
• 47:22 — Experts do not dare to say it out loud
• 48:55 — The 1990s recession has become mythologised
• 51:29 — A debate on principles before the next step
• 53:44 — Target 2 and hidden joint liabilities
• 55:18 — The central bank recapitalisation agreement may not exist
• 57:09 — Finnish federation models do not interest Paris
• 59:01 — Finland needs red lines and a backbone
• 1:00:56 — Credibility requires the option of leaving the euro
• 1:02:14 — Peter Nyberg and the euphemism of political cost
• 1:04:24 — Is the euro still a security solution against Russia
• 1:05:34 — The model of French and German dictation must be broken
• 1:07:05 — The euro is not in trouble because of populists
• 1:08:09 — The endgame is a cut in domestic living standards

Watch

The recording lives on the Neuvottelija channel: Euro | Juhani Huopainen | Neuvottelija 72. A Finnish edition of this episode is published at www.neuvottelija.fi.