International

In the spring the Finnish parliament debated giving up the euro and returning to the Markka. Originally it appeared that the Finns might hold a referendum on the issue this autumn, but since then it turns out that even the extreme right ‘True Finns’ party would rather wait to see what the consequences of Brexit will be for the UK and have ruled out a referendum being held this year. So it seems Finland’s speedy withdrawal from the eurozone is off the agenda, but the euro remains nevertheless a shaky project and the Finance Ministers of the countries which use it, presided over by the Netherlands’ own Jeroen Dijsselbloem, would do well to be better prepared for the eurozone’s disintegration than the British were for a possible Brexit.
 

The euro’s instability is the direct result of the enormous differences of economic power among the eurozone countries. Southern Europe is forced to become more attractive to capital via endless spending cuts and reductions in wages, but this leads in rapid tempo to the immiseration of ordinary people in Greece, Portugal and Spain. Discontent is widespread there and things can’t continue like that.

If cuts were less deep and wages did not fall any further, this neoliberal economic model would no longer work, as the countries in question would remain too dear. This led this week to a plan, put forward by Chancellor Merkel and president Hollande, to aid the weaker eurozone countries by using the profits from EU taxes and a European Monetary Fund. Where, before the euro, countries could reduce the value of their currency – devaluation – and thus make their exports cheaper, since its introduction this is no longer possible. That means that aid to the weaker eurozone countries must acquire a permanent character. This will undoubtedly lead to further tension with the people of the richer eurozone countries who after all have had their own austerity policies to contend with. Finland is one example, but in the Netherlands too this will only increase the euro’s unpopularity.

I can well understand why the Finns are not prepared – as yet – to gamble on giving up the euro. On the other hand it would be better for the currency to unravel in a controlled and gradual fashion than that a possible big bang hits it as soon as the tensions in the eurozone countries arrive at an explosive boiling point. The SP has for years been calling for a ‘Plan B’, one which would enable the consequences of a euro-exit to be, as far as possible, overcome. If a country wants to leave, it should not be treated as a pariah, but deserves the solidarity of us all. It would therefore be helpful if the Finance Ministers could overcome their anxiety and show that there really is life after the euro.