The politics within national borders have been a limitation to the bailouts of financially weak European nations which so far include Ireland, Greece, and Portugal. Ruling parties have been put out of office in Ireland and Portugal where voters have resisted leaders who have negotiated loans which are too onerous, at least in the minds of their citizens. German voters have begun to pressure Chancellor Angela Merkel to do less to help her neighbors and more to help her citizens.
Now it seems that voters in Finland will prove that all politics are local. These voters are mad about the government’s decision to invest in Portugal’s financial future. “Finland holds parliamentary elections on April 17 and eurosceptic parties, which oppose bailing out Portugal or even increasing the effective size of the bailout fund, the European Financial Stability Facility (EFSF), are gaining support,” Reuters reports.
The threat to leaders in Finland and Germany leaves the EU and future of the euro in an odd bind. Nations that need bailouts have voters who do not want them, at least on the terms offered. Nations that could offer aid may be detained from giving that aid by their voters. The pressure on both sides makes bailouts less and less likely, and a default by one of the weak nations more likely.
What was supposed to be a grand financial plan to save the region financially has become a gigantic political headache. The rescue program was nice while it lasted, but its architects may not survive to see it through.
Douglas A. McIntyre