Finland says farewell to the Markka

"The Euro: what 'value' a currency?"

Before leaving Scotland a friend handed over some old Finnish markka,
challenging me to see if I could “still use them.”

In truth the Finnish markka ceased to be legal tender in 2002. Finland adopted the euro when entering the Eurozone in 1999, and is still the only Scandinavian country to have embraced the single currency.

My only option, then, is to get them changed.  On a day when the euro crisis has deepened, and Nokia Siemens Networks has been forced to announce cutting a quarter of its workforce,  I show the 240 Finnish markaas, including two big green notes depicting the composer Sibelius to Jenni, the teller at Forex Bank.  She looks surprised to see them. “You want to get rid of them,” she advises, adding that from next year nowhere will take them, even the Finnish National Bank.  “Are the Finns sad about that?” I ask.  “No” she says instantly.

“With everything that’s been going on in the Eurozone, do Finnish people want their old currency back?” I ask, adding, “are you fed up of the euro?” Jenni’s smile falters.  She looks at me as if I am stupid.  “No, why?” she asks.

Her reaction will be a disappointment to Timo Soini, the outspoken leader of the far-right party True Finns, who made surprising gains in last year’s election.  Soini is an outspoken critic of the EU, and has since voiced his desire to run for the presidency.  He takes credit as attempts to derail the bailouts of Portugal and Greece.

Every Finn I speak to seems embarrassed by the True Finns.  “Finland is a Social Democratic country, like the rest of Scandinavia,” Taisto Oksanen, 47, a well-known Finnish actor tells me. “But in the last ten years we’ve seen that erode.  We didn’t have too much of a class divide before, but since the Euro some people have got very rich, and a few hundred thousand people have just dropped into poverty. Our education and social welfare has been damaged.   The old parties were seen as corrupt and in with business, so I think people voted for the True Finns for change.  But it’s happening all over Europe – people are voting for those that blame the immigrants.  Look at Spain.  It is history repeating.”

“True Finns are very conservative, want the Finnish markka back and to kind of isolate Finland from the rest of Europe.  I don’t know how the support packages will actually help the citizens and I think that the banks should also take some responsibility for all of this.” says International Business student Milka Tanskanen, 21. “ I was ten years old when we started to use Euro in Finland, so I don’t actually have any real experience of the Finnish mark.”

“The old notes were nice,” Oksanen tells me.  “The euro, the note, doesn’t mean anything to me.  It has less ‘value’.”

 

Salmond “scared of separation”

Iain Gray used today’s First Minister’s Questions to corner Alex Salmond over his refusal to name a date for Scotland’s referendum on independence, accusing the First Minister of being “scared of separation”.

In typical First Ministers’ Questions style, Mr Salmond responded in kind by accusing the Labour leader of being “frightened of the concept of independence.”

The Labour leader urged Mr Salmond to “steady the ship and decide a date for the referendum,” after a week of bickering between Holyrood and Westminster, which saw Finance Secretary John Swinney accuse the UK Government of “becoming ever more hysterical” over the issue of independence.

The First Minister confirmed that the referendum would take place in the second half of the SNP’s current term in parliament, as set out during the party’s election campaign earlier this year, but refused to confirm a specific date.

Mr Gray said: “The longer this goes on, the more it looks as if Alex Salmond is trying to rig the referendum to get the results he wants.

“He always puts party before principal and isn’t that why he can’t name a date?”

Mr Salmond responded by saying: “Some people in the Labour party actually recognise that they lost the election and have to accept the mandate of the Scottish people.”

He added: “Westminster should keep out of the referendum and not meddle.

“It would be insulting and contemptuous for the Scottish people for Westminster to get involved.”

The First Minister went on to say that a number of opinion polls are showing increasing and substantial support for an independent Scotland. He reminded the main chamber that the SNP were re-elected with “a massive majority” six months ago on the basis of their promise to hold a referendum.

He went on to express concerns that the UK Treasury was not keeping the Scottish Government properly informed about the impact the euro will have on the Scottish economy. The Chancellor, George Osborne, is yet to respond to John Swinney’s request that economy-boosting measures are included in the Treasury’s autumn statement, including an increase in capital spending.

Budget could be Cowen’s last action

By Ryan C. Gavan and Edoardo Zandona

Brian Cowan

Tough times for Taoiseach Brian Cowen (Image:Telegraph)

The Irish austerity budget is likely to be Brian Cowen’s last action as Taoiseach , as he is set to call an election early in the New Year.

The budget was set to be announced on December 7th but after mounting political pressure, an announcement will be made this afternoon. The aim will be to set out the plans to reduce the country’s deficit to 3% of GDP by 2014.

This will lead to welfare cuts and tax rises of up to 50%  for low paid workers. The minimum wage is set to be cut by 13% and middle class families will lose tax credits.

The IMF and the EU  have sanctioned an extensive bailout package of  €90Bn to the Irish govenment.

The Irish government states, “providing assistance to Ireland is warranted to safeguard financial stability in the EU and Euro area.” 

Initially, they did not wish to accept the bailout package, feeling confident the problems could be resolved without a handout.  After extensive meetings with EU finance ministers it was accepted on Sunday evening.

In a reversal, Cowen rejected calls from junior coalition partners the Greens to hold a snap election.

After discussions with his own parliamentary party last night, Cowen stated he will, ” seek the dissolution of Dail Eireann and enable the people to determine the responsibilities of government in the challenging period ahead.”

 He has denied accusations that he is  “hanging on” to power.

This could be welcomed by Sinn Feinn, who called for a vote of no confidence in the  Taoiseach yesterday. The party has seen increased support in recent times, prompting Gerry Adams to say that he will stand in  Louth for election to the Dail.

It has been recently reported that Ireland’s international credit rating has been dropped by Standard and Poor’s from AA- to A. This could have a great impact on the overall economy due to Ireland being highly dependent on oversees investment. The view that they may have difficulty repaying loans could increase interest rates and cause further problems.

Ireland’s debt crisis is the result of the property market crash, starting in 2008. After the huge economic boom, house prices have fallen by up to 60% and the banks have held bad assets ever since.  

Aiding to matters is the part-nationalisation of many of the country’s banks, turning into state-held debt.

Irish Finance Minister Brian Lenihan stated “an increase in corporation tax will not be a condition of the bailout.”

Ireland has the lowest level of corporation tax in the Eurozone at 12.5% which has come under scrutiny by other EU member states, such as Germany and France.

Bail out tussles in Brussels

At a time of bleak economic news where the Sterling is nearly matching the value of the Euro, the pound reaching an extraordinary low today – European heads of state gather in Brussels. The atmosphere is tense.

At PMQs Gordon Brown had a Freudian slip, saying that the government “saved the world” instead of “saved the banks”. At least he is supposed to be the ‘saviour of Europe’. His suggested bail out plan was officially taken up as an economic recovery plan by the European Commission. It is supposed to be decided on for all the other European member states in the current European Council meeting in Brussels.

“It’s the best way to restore citizens’ confidence and counter fears of a long and deep recession”, Commission president Jose Manuel Barroso told the BBC in November this year.

However, some member states like Germany which alreadyhave implement national measures to save their economies oppose a joint approach.

The United Kingdom  implemented a £ 12.5 bn VAT cut last month which was harshly criticised by Germany’s finance Minister Peer Steinbrueck in a Newsweek interview yesterday. Steinbrueck said that the UK measures were “crass” and “breathtaking” and also said that a great rescue plan “doesn’t exist!” He said the cut would only pull the UK into greater debt instead of helping consumers.

Germany has already spent around £ 370.4 bn on a bail out of its banks, far more than the EU bail out plan is expected to raise. It is therefore now cautious about spending even more.

Other issues expected to be discussed at the summit are the Irish “No-Vote” on the Lisbon Treaty and climate change policies.

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