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Will Finland be first to quit the euro?

Finland is most likely to be the first country to leave the eurozone, according to the Wall Street Journal’s MarketWatch. However there were no moves in this direction in Helsinki on Wednesday.

Old Finnish 500 mark notes
Image: Yle Keski-Suomi / Jarkko Riikonen

Columnist and author Matthew Lynn, head of the London-based Strategy Economics consultancy, argues that Finland has the most to gain by exiting the single currency.

In a column published on Wednesday, Lynn notes that as Finland is “a small nation with a strong economy” is would be easy for it to head for the door.

“Finland would be better off on the first day,” he notes, adding that “it doesn’t particularly have to worry about the impact on the European Union, in the way that Germany would if it opted out.”

A Finnish departure, he predicts, would then prompt others to abandon the currency, thus defusing the euro crisis.

Parliamentary committee approves ESM

In Helsinki, there was no sign of moves in this direction although the opposition Finns Party lambasted the government over its euro policies in debate ahead of a vote of confidence on Thursday.

Prime Minister Jyrki Katainen and Finance Minister Jutta Urpilainen struck back forcefully against criticism from the Finns Party, asking its MPs to spell out a credible alternative to supporting Spain.

Meanwhile the legislature’s Finance Committee recommended that Parliament approve the European Stability Mechanism (ESM), which is to begin operations in early July. Finland and 16 other countries signed the treaty setting up the institution in February.

Finland’s share of the mechanism’s capital is nearly 12.6 billion euros. So far Finland has paid just over 1.4 billion into the fund, and promised to pay the remainder on demand.

Committee members from the opposition Finns and Centre parties voted against the decision and submitted their own dissenting opinion.

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