“A boycott of Russia would sink the Finnish economy” – and Finland might have to leave the euro

[update 15:44 – changed the title because it wasn’t a gramatically correct translation]

The news item below is translated from Finnish. I today talked about this with a colleague of mine at work. But in general I think this kind of boycott would bite back very hard, in particular for the Netherlands, Germany, Finland and London/UK. The Netherlands has very large trade interests in Russia (Russia is its 7th largest trade partner), and in the newspaper this dilemma is the age-old Dutch foreign policy problem between “being a priest or a merchant”.

So I think politicians haven’t really thought this threatening with sanctions through. Please do before you do more damage!! Europe’s economy is so fragile. And as I show below, a trade boycott may force Finland out of the euro.

But the translation:

– A trade war is a nightmare scenario, which unquestionably would sink the Finnish economy, Lehto warns at the publication event of the Labour Institute of the Economy’s economic forecast in Helsinki on Thursday.

According to Lehto, a trade war would hit Finland much harder than other countries, as told by Verkkouutiset.

– It would lead to unpredictable political consequences, because we would have to evaluate our membership to the currency union, he said.

Staying in the euro has to be evaluated, because according to Lehto Finland would need a corrective change in its exchange rate. The ECB would not consider such a move, because its monetary policy is based on the average situation [across the eurozone -PJH].

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6 responses to ““A boycott of Russia would sink the Finnish economy” – and Finland might have to leave the euro

  1. “Staying in the euro has to be evaluated, because according to Lehto Finland would need a corrective change in its exchange rate.”
    Yeah? And why not an internal devaluation like the ones Finland contributed to impose on south european countries? What is good for the others is not good for Finland apparently.

  2. I didn’t intend to say it is good policy, on the contrary. I just pointed the double speak. Hypocrite, as you say.

  3. Pingback: Russian sanctions, sanctions against Russia and the Finnish economy | Arjen polku

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