Posted Friday, June 29, 2012, at 11:22 AM
As Germany continues to agree to increasingly baroque bailout schemes while insisting on tight money from the European Central Bank, a new silly portmanteau word is taking the financial world by storm: Fixit.
Fixit? Fixit = "Finland Exit." In other words, it's a departure from the eurozone not of a weak state but of a strong one.
Here's why. So far, negotiations with the so-called peripheral states have been undertaken either by Germany or by Germany with its usual diplomatic partner, France. But a cluster of substantially smaller eurozone member states—Luxembourg, the Netherlands, Austria, and Finland—are basically serving in the role of junior partners to any financial commitments undertaken by Germany. These countries, however, don't have Germany's unique historical situation and don't get to play Germany's quasi-imperial role in German decision-making. Any one of them might decide at any moment that Angela Merkel is writing checks on their behalf that they don't want to cash and pull the plug.
Finland is a particularly likely case for several reasons.
One is that as illustrated above with figures taken from the Finnish government, Finland isn't all that economically integrated with the eurozone to begin with. Like most countries, it trades a lot with its neighbors, but neither Russia nor Sweden is in the eurozone. Another is that the structure of Finnish politics is a bit different. In almost all eurozone countries, euroskeptical parties are tainted with general extremism. Many voters regard Greece's Syriza as a communist party and France's National Front as a fascist one. But Finland's Center Party is an old-time and very respectable agrarian/petty bourgeois political formation that's served in government many times. Right now it and the far-right True Finns party are out of government, and a grand coalition of conservatives, greens, social democrats, and ex-communists are governing on a tenuous pro-bailout platform. But that coalition could collapse at any moment, and the Center could lead the country.