Räsänen: Common liability for debts is not a medicine

13.04.2011

- Prime Minister Kiviniemi compares Finland's participation in supporting Portugal to poison. The poison needs to be swallowed if that is what is needed for medicine, she says. By the parable she aims at justifying Finland's proportion of 1,2 billion euros in the mechanism to support Portugal. However, poison is never used as a medicine for cure; poison aims at killing, Mrs Päivi Räsänen, president of the Finnish Christian Democrats, comments on the Prime Minister´s remarks.

- European countries, including Finland, are deeply in debt. Mutual guaranty and debt arrangements by these over-leveraged countries seek to support banking systems, and it does not enhance a healthy way of managing finances. Banks and investors are to carry their responsibility for imprudently granting credits. Moreover, countries themselves are responsible for ensuring the operation capacity of their own banks. Compared to the investments by Finnish credit institutions in the indebted EU member states, the proportion of Finland in the guaranty arrangement is excessive.

According to Mrs. Räsänen in the end of this year, Finland has 84 billion Euros government debt, increasing by 8 billion per year. Even our guaranties for Greece are covered by increasing our own debt. The recession crisis we had in Finland in the 90´s taught us to be careful with guaranteeing loans. The amount of guaranties should never exceed the amount of money that one is ready to donate. Especially it is not wise for anyone with debts to guarantee a loan of someone else.

- Europe has adopted an economic policy that will later on be identified as a mistake. Among the countries involved there should be one brave enough to call an end to the game before it is too late, Mrs. Räsänen criticises.