Since 2011, Finland has spent most of its time with a trade deficit.
The reason for this is that Finland’s export economy is based on manufacturing, as opposed to the export of food, or oil, or raw materials. When austerity mania became global in 2011, it caused Europe’s economy to slow down, which caused Finland’s export market to slow, which caused Finland to fall into a trade deficit. Since Finland uses the euro, the national government cannot create money out of thin air. Thus, the red zone (above) means that billions more euros have been sucked out of Finland than have entered into Finland.
Finland is now in the death spiral of debt and austerity.
For average people in Finland (pop. 5.5 million) this has meant ever-worsening debt, poverty and unemployment. However it has been a bonanza for rich people in Finland, since the sole purpose of austerity is to widen the Gap between the rich and the rest. And austerity is unavoidable in countries that have large trade deficits, plus no Monetary Sovereignty. (For the USA, austerity is fully avoidable, and therefore fully gratuitous.)
Finland is one topic where Paul Krugman messed up and actually spoke the truth. In June 2015, he correctly called the euro currency a “straightjacket” for Finland.
Why can’t Finland recover this time? Debt is not a problem; borrowing costs are very low. But it’s all about the euro straitjacket.
Speaking of messing up, politicians in Sweden erred badly in 2003. Failing to properly brainwash the Swedish public into thinking they would all die without the euro, the Swedish politicians put it to a national referendum, and the people voted no. They voted to keep the Swedish krona. As a result, Sweden’s economy is much stronger than Sweden’s, while Sweden’s poverty and inequality are much less severe. (Whoops.)
Anyway Paavo Väyrynen is a veteran politician in Finland who mounted a drive to have a national referendum on whether Finland should keep using the deadly euro currency. The citizen’s initiative gathered more than the 50,000 signatures required to take it to the Parliament for consideration by MPs.
But Mr. Väyrynen evidently thinks the politicians will kill it (since the politicians are owned by the rich, who want the euro because they want more austerity, because austerity widens the Gap between the rich and the rest). Either that, or Mr. Väyrynen has sold out to the bankers, and to rich people, since Väyrynen no longer supports having a referendum.
I don’t know what’s true, but one article says:
Paavo Väyrynen wants a faster approach to exiting the eurozone than a national referendum. He says government* should present a statement to MPs supporting leaving the common currency region, in much the same way it argued for joining back in 1998. He says that ordinary Finns were deprived of a chance to decide whether or not they wanted to adopt the euro.
“A referendum could take years. We don’t have any time to waste now that the economy is in such bad shape and the euro area is rapidly becoming a debt union and a federal union.”
* (By “government” I assume he means the executive branch.)
According to Väyrynen, given the fact that a referendum would last too long, the process should work in the same way as it did back in 1998, when the government provided a statement to lawmakers on the matter. This time, however the government’s statement would take the opposite position, and outline the case for dumping the euro.
Väyrynen says that introducing a referendum would also be burdensome, because it would require legislative changes. However the faster procedure, the government statement, is also an unlikely outcome. Like I said, Finnish politicians are owned by the rich, who like the euro. It causes the government to be so starved of money that it must sell public assets at fire sale prices, thereby plunging average people into poverty. (Whatever is privatized becomes a profit machine, and therefore rapes the average people who use it.)
Mr. Väyrynen admits that his fellow politicians want to keep the euro that is killing Finland.
But it’s nice to dream.