Finland – A good girl on a mission?
On 25 November 2010, four days after Ireland's international reputation reached its low-point, another small country at the other side of Europe got itself branded. A new country brand report, entitled Mission for Finland! was published with a bombastic subtitle: “How Finland will solve the world’s most wicked problems’. Featuring a host of catchy slogans such as ‘Consider it solved!’ and ‘Finland – It Works!’ the report is a jubilatory 400-page celebration of ‘Finnish functionalism’, an attitude towards the world that is ‘practical, solution-oriented, and pragmatic rather than philosophical’.
Even though the branding delegates picked Nobel laureate Martti Ahtisaari as the figurehead for the mission, there is no doubt commissioner Olli Rehn would have made an equally satisfying poster boy. With Olli ‘substance is everything’ Rehn jumping on the bandwagon and offering a helping hand to his unfortunate compeers at the opposite side of Europe, the troubles in the Irish banking system would have been a terrific pilot for the global problem-solving project, save the fact that those helped were to end up in an economic detention for years to come.
On the level of Finnish state leaders, however, combining the new pragmatist mission with the current European banking crisis appears to be a slightly more complicated task. In a recent interview, president Tarja Halonen depicted Finland and Germany as 'the good girls' of the Eurozone, bullied, supposedly, by the reckless big boys in the classroom. Innocent victims of an externally imposed crisis. The statement is a perfect example of the way Finland's position with regard to the European financial crisis is usually presented in Finland. In this case, though, the biggest threat to the success of this self-victimization technique comes from the good girls' own banks and their hunger for profit. The role of German banks within the Irish crisis has already been discussed widely, but even Finnish banks, proud of their prudent funding policies, had close to a billion euros in Irish bank assets in November, with at least two of them having invested in Anglo-Irish Bank (according to the leaked list of bondholders). Unfortunately, these financial connections have gained little publicity in Finland, and so the myth of Finland as an isolated island in the tumults of a global crisis has been able to continue dominating the political parlance.
Last November, when the EU-IMF deal was still being negotiated, Minister of Finance Jyrki Katainen made an alternative proposal to the planned bailout, apparently in the true pragmatist spirit of the Finnish functionalist mission. Concerned about Ireland's collateral condition and the all-too-probable sovereign default, Katainen suggested that instead of having other EMU countries to guarantee the loan, Ireland should examine the possibility of collateralizing its NAMA assets and use them as collateral for the new loans. Much to Katainen's embarrassment, his proposal was greeted with an uncomfortable silence among his European colleagues. In Finland, Katainen's proposition had been supported by both left and right, and when he eventually withdrew from it altogether, he was accused of both lack of effort and playing for time.
But shying away from his own idea may have served to avoid another embarrassment. A similar arrangement had in fact already been in use in Finland from 1995–2001 to boost publicly funded housing construction without taking extra government debt. The government, led by the social democrats at the time with Tarja Halonen as Foreign Minister, set up a special holding company in Ireland, and sold almost three billion worth of repacked Finnish mortgage bonds. Ireland seems to have been chosen as the location for the company because of its favourable corporate legislation and – not really surprisingly – its low corporate tax rate. The main reason for Finland to push its government debt as low as possible was the future EMU membership. According to the National Audit Office of Finland, privatising the debt this way provided crucial help for the recession-stricken Finland to reach the requirements and make it in the Eurozone in the first place. While perfectly legal from the point of view of Finnish law, the manoeuvre was not exactly to the liking of Eurostat, and so the programme was closed in silence by 2007.
One of the immediate ironies in the story is that the very social democrats who had no problem whatsoever taking advantage of the tax rate for their own ends (making it to the Eurozone), are now bemoaning the Irish model of corporate social responsibility. For Katainen, on the other hand, proposing a method already condemned by Eurostat would not have looked too good at the outset.
In the ultra-pragmatic solutionism and benevolent interventionism promoted by Finland's new country brand, all the fun is derived from the fact that you don't have to mind your own business any more. Yet, sometimes focusing on your own actions, in past or present, may help you locate the problem. As it turns out, there hardly are any innocent victims in the quickly expanding, German-led European Union. Nor does an AAA credit rating guarantee that the country is, or has been, a good girl. And even if it did, we ought to bear in mind, as Sigrún Davíðsdóttir reminds us, that all the good girls in Europe are hardly different from their rascal banks - they may behave well at home but when visiting their friends 'take out their pen knifes and cut up the furniture'.
Kimmo Kallio is a PhD research student at Centre for Translation and Textual Studies, Dublin City University, studying Finnish translations of Irish literature from a socio-political perspective.
Image top via Gina Baby on Flickr.