Episode 89 · 2021-07-09 · 47:35 · Original in Finnish
The EU and the Euro Recovery Package | Sami Metelinen and Toni Vuorinen | Negotiator 89
Originally published as “EU ja euron elvytyspaketti | Sami Metelinen Toni Vuorinen | Neuvottelija 89”
The channel's first multi-guest episode: the journalist Sami Metelinen, author of Libera's euro report, and the economic analyst Toni Vuorinen ask what the EU's 750 billion euro recovery package is really about. Vuorinen advances the hypothesis that the package is an empirical experiment — the European Central Bank buys the joint debt and converts it into a zero-coupon perpetual, and if nothing follows, the same is done to member states' debts; the end point of his scenario is a return to national currencies via an ECU-2 basket model. Metelinen considers it possible but unlikely: he sees a federal objective running back to the 1970s, and the over-indebted countries have no interest in returning to their own currencies. Both reject the claim that the package is an Italian rescue, since ECB purchases keep Italy funded regardless.
Core theses
- Both guests reject the Italian-rescue framing for the same reason: ECB purchases already keep Italy funded, so the package is not what is doing that work.
- Vuorinen's hypothesis is testable in principle — if joint debt can be buried in the central bank balance sheet without consequence, member state debt follows.
- Metelinen's counter is about intent rather than mechanism: a federal objective traceable to the 1970s does not end in a return to national currencies.
- The over-indebted countries have no interest in leaving the euro, which is the structural fact that makes the exit scenarios unlikely whatever their internal logic.
Watch and listen
Key moments
- 00:00 — Opening teaser: the recovery package as a path to national currencies
- 01:38 — The first multi-guest episode, and ultra vires
- 03:40 — Was the treaty already broken during the support packages
- 04:42 — The ECB's purchases: the package did not rescue Italy
- 05:45 — Building the federation, and the EU's power to tax
- 07:11 — Vuorinen's hypothesis: burying the debts in the ECB's balance sheet
- 10:12 — If the experiment succeeds, member state debts are monetised at zero interest
- 10:55 — The ECU-2 basket currency model, with the IMF's SDR as the example
- 13:27 — Metelinen: the euro is part of a federal dream going back to the 1970s
- 15:55 — Vuorinen: a federation cannot be built on top of the present euro
- 18:25 — The EU's own resources, the plastic levy and customs duties
- 19:39 — Is the EU bluffing? The 2012 Greek haircut as a lesson
- 21:46 — Comparison with the United States: tax rate, debt and no bailout
- 25:08 — Rescuing the Italian banks, or a monetisation experiment
- 27:02 — A bailout is being created through the central bank all the time
- 28:33 — German ordoliberalism bent to the French line
- 30:04 — The current account surplus and Target2 claims as Germany's interest
- 32:29 — Finland's borrowing, and the ministry's 260 per cent debt projection
- 34:02 — The good sides of the recovery package, and parallel currencies
- 38:36 — A workable federation: the Swiss model and a minimal state
- 41:15 — The future of fiat money, cryptocurrencies and digital currencies
- 43:59 — Public goods, citizens' support, and closing words
Summary
The channel’s first multi-guest episode: the journalist Sami Metelinen, author of Libera’s euro report, and the economic analyst Toni Vuorinen ask what the EU’s 750 billion euro recovery package is really about. Vuorinen advances the hypothesis that the package is an empirical experiment — the European Central Bank buys the joint debt and converts it into a zero-coupon perpetual, and if nothing follows, the same is done to member states’ debts; the end point of his scenario is a return to national currencies via an ECU-2 basket model. Metelinen considers it possible but unlikely: he sees a federal objective running back to the 1970s, and the over-indebted countries have no interest in returning to their own currencies. Both reject the claim that the package is an Italian rescue, since ECB purchases keep Italy funded regardless.
What both of them rule out
Two guests who disagree about almost everything else agree that the package is not an Italian rescue, and their reason is mechanical: the central bank’s purchases already keep Italy funded. That agreement is more informative than either of their forecasts, because it rests on how the system works rather than on where it is going.
A hypothesis with a test in it
Vuorinen’s claim is that joint debt on the ECB’s balance sheet is an experiment, and that success would be followed by doing the same to member state debt. Whatever one thinks of the conclusion, stating it as a sequence makes it checkable — and four years on, the sequence has not run.
Intent against mechanism
Metelinen’s counter-argument is of a different kind: a project with a federal objective reaching back to the 1970s does not terminate in national currencies, however the arithmetic works. The episode is at its best where the two kinds of argument meet and neither dissolves the other.
Watch
The recording lives on the Neuvottelija channel: EU ja euron elvytyspaketti | Sami Metelinen Toni Vuorinen | Neuvottelija 89. A Finnish edition of this episode is published at www.neuvottelija.fi.
In depth
The Neuvottelija AI editions carry a long-form write-up of this episode: English · suomeksi.
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Negotiation Strategy, Leverage and Power: Reading the Counterparty You Actually Have
A negotiation guide from the co-author of Neuvotteluvalta — the sources of leverage, BATNA and anchoring in practice, using information asymmetry, breaking deadlocks, and what to do when the counterparty negotiates on power rather than consensus. Grounded in Neuvottelija conversations and two decades of negotiation writing.
People and topics
Guests: Sami Metelinen, Toni Vuorinen
Topics: Geopolitics Finnish Economy & Policy