Finland’s Brain Drain: When Talent Leaves a Small Country
Young Finnish professionals are attracted to major European capitals. They move to Stockholm, Berlin and Amsterdam, as well as farther away. The sun shines in Dubai; the world’s top organizations and institutes are in New York and Washington. The occupations of these migrants are manifold: bankers, graphic designers, computer engineers, photographers and researchers, to name only a few.
They leave Finland because of poor employment opportunities and future prospects. This has been happening for a long time. Finns were moving to North America 100 years ago and to Sweden after World War II — in both cases because growing economies needed factory workers.
The difference with today’s migrants is they are better educated (PDF) and leaving a welfare state that ranks as one of the best places to live in the world according to most indices. The likelihood of them returning has nevertheless fallen sharply. Why? Read more
Britain won support from Finland and Sweden on Monday for its efforts to reform its relationship with the European Union. But there is also misgiving in the region that the United Kingdom’s push for a looser affiliation with the continent could lead to a two-speed Europe that sees non-euro countries relegated to second-class status.
Alexander Stubb, Finland’s finance minister, said Britain was justified in demanding further liberalization, especially in services, as well as restrictions on welfare benefits for migrant workers.
“Our take is very simple: without the United Kingdom there is no European Union,” he said after consulting with his British counterpart, George Osborne, in Helsinki.
He later told the Financial Times that Osborne’s was a “very constructive approach, results-orientated, problem-solving. It’s a path that will ensure British membership for the foreseeable future,” he said.
The British chancellor, who is seen as a potential successor to David Cameron, has been deputized by the prime minister to lead his country’s negotiations for changes in its European Union membership. Cameron has promised to call a referendum on membership by 2017.
Polls suggest that a majority would vote to stay in the bloc but most Britons also support the ruling Conservative Party’s desire for a less intrusive European Union, one that focuses more on trade and can be checked by national parliaments.
The finance minister of Sweden, which — like Britain — is not in the eurozone, stressed the importance of making sure countries outside the currency union are not neglected.
“For us it is important to have Britain within the European Union and we will of course engage constructively in those discussions that will be coming in that period,” Magdalena Andersson said.
She earlier warned that deeper economic and political integration between countries that use the euro could see the influence of other member states, like Sweden, diminish.
Britain’s reform efforts exacerbate that risk. As the Atlantic Sentinel reported in May, Germany has proposed to link its own push for a more integrated eurozone with the United Kingdom’s desire for a less closer union. This could see Europe end up with an integrated core of euro states surrounded by some loosely affiliated countries like Denmark, Sweden and the United Kingdom.
Britain’s foreign secretary, Philip Hammond, confirmed that such a two-speed Europe was one of his objectives. “We seek reforms that will allow those countries that want to integrate further to do so while respecting the interests of those that do not,” he said in June.
Denmark — the only other member state with a formal opt-out from the euro — earlier said it supported Britain’s proposals. Lars Løkke Rasmussen, the liberal party leader and prime minister, said it would be a “disaster” for Europe if David Cameron was unable to keep Britain in the union.
“Some of the points the British are prioritizing match my own thinking,” Rasmussen said in June, “namely that we need to strike a new balance between the free movement of labor and what welfare services those rights entitle a person to.”
Parliaments in the eurozone voted in favor of another support program for Greece this week but there were signs of rebellion on the left and the right.
In Germany, sixty of Chancellor Angela Merkel’s own Christian Democrats voted against the planned €86 billion bailout — which would come on top of the €240 billion European countries and the International Monetary Fund have lent the Balkan nation since 2010.
Despite Merkel’s insistence that the country would be watched carefully — this time — by its creditors to ensure that what she described as “unprecedented European solidarity” was matched by the implementation of economic reforms, rightwingers are skeptical. Not only has Greece repeatedly reneged on its reform commitments in the past; it now has a far-left government that was elected on promises to end austerity.
The opposition Die Linke criticized Merkel from the other side, saying her policy of financial aid in return for liberal reforms was “destroying Europe.”
The vote still went in the chancellor’s favor. 439 out of 631 lawmakers gave her the authority to negotiate another support program.
Similarly, in the Netherlands, Prime Minister Mark Rutte won the support of lawmakers on Tuesday to negotiate a third bailout even though his own liberal party expressed doubts that the Greeks could be trusted to keep their word.
The nationalist Freedom Party, which is vying for second place in the polls with the pro-European liberal Democrats, voted against.
The liberal Democrats, by contrast, urged Rutte to go further and recognize the need for Greek debt relief. “Why won’t Prime Minister Rutte and his party admit this is in order?” they asked.
Rutte will need the Democrats’ support to get another Greek bailout through the upper chamber of parliament where his own liberals and Labor Party allies don’t have a majority.
Doing so would force the Dutch leader to break his 2012 election promise not to support any more bailouts. “I don’t like it and it’s a bad situation,” he said this weekend after eurozone leaders had reached a last-minute compromise to keep Greece in the single currency.
Two of the three right-wing parties in Finland’s ruling coalition voted against Greece’s second bailout in 2012 when they were in opposition. But a parliamentary committee nevertheless supported the government’s request to start negotiations for a third bailout on Thursday — including the nationalist Finns Party.
In April’s election campaign, the Finns argued against further support for Greece and suggested that the country would be better off leaving the euro. On Thursday, party leader and foreign minister Timo Soini backpedaled, saying “there are no good alternatives” to preventing a Greek default and ejection from the eurozone.
Polls show majorities in Finland, Germany and the Netherlands favor a Greek exit from the euro.
Some in the Greek ruling party favor “Grexit” as well. Panagiotis Lafazanis, the far-left energy minister, defied his own government this week to reject the terms of another bailout. So did Yanis Varoufakis, the former finance minister.
38 out of 149 members of Prime Minister Alexis Tsipras’ Syriza delegation defected or withheld their support in a vote on Thursday morning. Parliament still gave him a mandate to secure a third bailout by 229 votes to 64 thanks the support of opposition parties.
Under the deal struck in Brussels this weekend, Greece is to implement far-reaching economic reforms, including higher sales taxes, pension cuts, a liberalization of the labor market and billions worth of privatizations, before it can access the latest bailout funds.
Greece’s previous two bailouts were paid out in tranches. While nominally conditioned on economic reforms, the country failed to implement many measures its creditors believed were necessary to boost Greek competitiveness and prevent another debt crisis in the future.
Given the rebellion in Tsipras’ party, elections are likely to be called later this year. “If it is not September, it will be October,” Nikos Voutsis, the interior minister, said on Greek radio.
To bridge the period between now and when the third bailout is negotiated, Greece will be allowed to draw €7 billion from the European Financial Stabilization Mechanism, a rescue fund that was set up in 2010. Non-euro countries, like the Czech Republic and the United Kingdom, have contributed to the fund as well, requiring their acquiescence to help Greece.
The country needs the money to pay back €7 billion to the European Central Bank this month. Failure to do so would leave the Frankfurt-based bank with little choice but to stop emergency support for Greek banks.
Greece imposed capital controls after it failed to make a €1.5 billion repayment to the International Monetary Fund last month. Daily cash withdrawals were limited to €60 or €120. With the prospect of a deal, some banks are expected to reopen on Monday.
Third Bailout Tough Sell in Northern Creditor States
The €82 to €86 billion bailout European leaders agreed to give Greece on Sunday — provided it enacts far-reaching economic reforms — could be a tough sell in those creditor states that have taken the hardest line in recent negotiations.
Two of the three right-wing parties in Finland’s ruling coalition voted against Greece’s second bailout in 2012 when they were in opposition. Neither is particular sympathetic now that Greece has canceled some of the reforms it was committed to undertake and has a far-left government that was elected on a promise to end austerity.
Prime Minister Juha Sipilä’s Center Party is wary of continuing to help Greece when Finland has made cuts of its own year after year to keep its deficit under the European 3 percent treaty limit and maintain a pristine credit rating. But like former premier and incumbent finance minister Alexander Stubb’s conservative National Coalition, it is unlikely to break with Germany and its chancellor, Angela Merkel, who reluctantly backed another bailout on Sunday.
The nationalist Finns Party, led by Timo Soini, might care less about European unity. In a recent interview, Soini accused the Greeks of running a pyramid scheme and said, “Usually someone in debt does not set conditions but rather pays his debt, so this arrangement is a bit upside-down.”
Greek prime minister Alexis Tsipras demanded both debt relief and a relaxation of the austerity measures his country has struggled to implement under two rescue plans, totaling €240 billion.
After a marathon session of eurozone leaders on Sunday, Tsipras apparently gave in and agreed to enact the reforms he previously described as “absurd” and “humiliating.” Other countries conditioned a third bailout — which Greece needs to avoid bankruptcy and a possible ejection from the euro — on the Greek parliament voting in favor of the reforms beforehand.
The antics of the Tsipras government, which waited until the last minute to compromise after calling a referendum on its lenders’ terms, the outcome of which it first hailed as a victory for democracy and then ignored, have exhausted the patience of many Northern Europeans.
The Finns are wariest of all. A YouGov poll shows only 14 percent in favor of Greek debt relief, the lowest ratio in the six countries polled.
The Dutch are hardly more forgiving. Prime Minister Mark Rutte was forced to admit on Monday that his support for another Greek bailout would violate his 2012 election promise to the contrary. “I don’t like it and it’s a bad situation,” he said.
Opposition parties were critical. The Christian Democrats said they had “serious doubts” about another bailout. The nationalist Freedom Party accused Rutte of making budget cuts at home while subsidizing the Greeks. Small Christian parties said the Balkan nation would be better off leaving the euro. The far-left Socialists and Greens criticized austerity and the demand for privatizations in Greece.
Without the support of at least one other party, Rutte’s liberals and his Labor Party allies would be unable to get another Greek bailout through the Dutch parliament. The ruling parties can count on the support of the pro-European liberal Democrats but the three lack a majority in the upper chamber.
An RTL poll conducted earlier this month revealed that 54 percent of the Dutch want Greece out of the euro. Just 30 percent said the country ought to stay in the currency union.
The Germans are a little more sympathetic. 47 percent want Greece out, according to the YouGov poll, down from 58 percent last month.
Yet two of the country’s three most powerful politicians seem ready to let Greece go. Economy minister Sigmar Gabriel, who leads the junior Social Democrats in Chancellor Merkel’s coalition government, said another bailout was “barely conceivable” after 60 percent of Greeks voted against austerity in a referendum two weeks ago and pledged, “We will not let the exaggerated electoral pledges of a partly-communist government be paid for by German workers and their families.”
Wolfgang Schäuble, the hawkish finance minister, even suggested this weekend that Greece take a five-year holiday from the euro.
But Merkel balked in the end, fearing the political and geopolitical repercussions a Greek exit from the single currency would have. It could be seen as a failure of her strategy: demanding reforms to boost Greek competitiveness in return for financial aid. It would demonstrate that European integration is not irreversible after all. And it could push Greece into the arms of Russia.
Given the overwhelming majority the two ruling parties enjoy in the Bundestag, a vote on a third bailout there is unlikely to go against Merkel. But some of her conservatives may well abstain or even vote “no”. Merkel’s Bavarian sister party, the Christian Social Union, is especially critical and the right-wing anti-euro party Alternative für Deutschland has been rising in the polls.
Finnish Right-Wing Coalition Could Take Hard Line in Europe
Finland’s next coalition government could take a hard line in Europe as the nationalist Finns Party is expected to come to power for the first time.
In an interview with MTV television last week, Finns Party leader Timo Soini suggested that eurozone members who are unable to keep up with deeper integration may have to leave the single currency union. Asked if he would like to see Greece leave the euro, Soini said, “That would perhaps be the clearest option, for everybody, also for the Greeks.”
Soini’s is currently in talks with Finland’s two mainstream right-wing parties to form a government. It came in second in an election last month when Juha Sipilä’s Center Party beat outgoing prime minister Alexander Stubb’s conservative National Coalition into third place. The three parties would have a fourteen-seat majority between them in the Finnish parliament.
The National Coalition previously ruled in coalition with the Social Democrats who are seen as more pro-European. Finland — one of the few countries in the euro that has maintained a pristine credit rating through the crisis — nevertheless balked at another round of financial support for Greece in 2011 and only agreed to support a second bailout when it won a collateral deal.
The Center Party and the Finns both voted down the second Greek rescue plan when they were in opposition.
Sipilä has toned down his rhetoric since winning the election, telling reporters last week, “I have my own view on how the situation should be handled but we will together see what is possible.”
The Finns Party, which is also critical of immigration, is less radical than its populist counterparts in other countries, including neighboring Sweden where the main left- and right-wing parties have teamed up to prevent the Sweden Democrats holding the government hostage.
Finnish voters have gone through three years of economic contraction and are not very sympathetic to the Greeks whose new government is demanding relief from austerity at the same time it needs a fresh bailout package.
Finland Deploys Navy as Russian Submarine Suspected
Finland’s navy said on Tuesday it had dropped three warning charges over an unidentified object in the Nordic country’s territorial waters near the capital, Helsinki.
The incident comes six months after neighboring Sweden scrambled its maritime forces in a hunt for what was suspected to be a Russian submarine in its waters.
A Finnish defense spokesman said it was too early to tell if the object was a submarine. A full analysis of sensor data could take days, he said.
The spokesman added that it was highly unusual for charges to be used. “I have been in the navy since the 1990s and I can’t recall it happening,” Commodore Olavi Jantunen told reporters.
Jantunen emphasized that the bombs were not meant to damage the target. “The purpose is to let the target know that it has been noticed,” he told Helsingin Sanomat newspaper.
Tensions have been rising in the Baltic Sea region since Russia occupied and annexed the Crimean Peninsula from Ukraine last year. Fighter jets from Northern European countries have regularly intercepted Russian strategic bombers and planes approaching their airspace through last year.
Russia stepped up its provocations after a row with the European Union over the bloc’s improving relations with its former Soviet republic, Ukraine. Especially Eastern European states that used be in Moscow’s orbit are worried about Russian revanchism. NATO deployed troops in member states east of Germany for the first time since the end of the Cold War in a bid to reassure them.
In February, Finland and Sweden, which have stayed out of NATO, signed a military cooperation agreement that could see the two nations go to war together in the event of an attack.
Earlier, they agreed with other Northern European countries, including Denmark and Norway — which are both in NATO — to improve intelligence sharing and joint air force training.
Support for joining the Western military alliance has risen in Finland and Sweden since relations with Russia deteriorated.
Right-Wing Coalition Likely in Finland After Center Party Victory
Finland’s Center Party won the parliamentary election on Sunday while the Euroskeptic Finns Party was projected to narrowly beat Prime Minister Alexander Stubb’s conservative National Coalition into third place.
With the Social Democrats winning only 34 seats in Finland’s 200-seat legislature — down from 42 in the last election — a center-right coalition, including the Finns, seemed most likely to take over from the broad alliance that has governed the Nordic country since 2011.
The inclusion of the Finns Party could harden Finland’s stance in Europe. The country imperiled the Greek bailout program when it demanded collateral for its financial support in 2011. Both the Center Party and the Finns voted down the second Greek rescue plan when they were in opposition.
The Finns, who are also wary of immigration, are less radical than their populist counterparts in other countries, including neighboring Sweden where the main left- and right-wing parties teamed up to prevent the Sweden Democrats forcing snap elections.
Finnish voters, having gone through three years of economic contraction, are not very sympathetic to the Greeks whose new government is demanding relief from austerity at the same time it needs a fresh bailout package.
However, the domestic economy dominated the election campaign and the Finns Party fell from 19 to 17.6 percent support.
Stubb’s coalition with the Social Democrats and two smaller parties, the Christian Democrats and the Swedish People’s Party, was unable to get significant reforms done, despite broad political consensus on the need for health care and labor overhauls.
All major parties also agree public spending must come down to prevent the national debt rising over the European Union’s treaty limit of 60 percent of gross domestic product. Finland is one of few countries that has so far respected the bloc’s debt and deficit limits. Between 1996 and 2008, it managed to reduce its debt from 57 to 34 percent of economic output.
The left-right coalition’s inability to pull the economy out of recession appears to have convinced Finnish voters they’re better off falling back on a familiar model.
For much of Finland’s independent history, the Center Party (formerly the Agrarian League) and the Social Democrats alternated in power while the National Coalition seemed perennially stuck in second or third place.