Tag Archives: IReland

Frances Coppola on Latvia – lessons for Finland as well!

Also in Finland Latvia is seen as an example, why a nation should implement harsh austerity (like the new Finnish government is going to). But Frances Coppola explains:

To me, Latvia resembles a puppet whose strings are controlled by large Scandinavian banks. The 2004-8 boom was caused by excessive lending by Scandinavian banks: the “sudden stop” in 2009 was caused by the failure of Scandinavian banks:the short-lived recovery was driven by Scandinavian bank lending: and the present stagnation is due to credit rationing by Scandinavian banks. Latvia is not going to experience any further recovery while its financial sector remains dominated by foreign banks who don’t want to lend cross-border. The Balkanisation of the European banking system has severe consequences for the Baltic states.

Latvia has little or no control of its monetary conditions, and now it has joined the Euro it doesn’t have much control of fiscal policy either. Its prosperity is entirely determined by the commercial interests of foreign banks and the attitude of their regulators. Is this really what the people of Latvia want?

I am really dumbfounded by the stupidity of the political class, and the apparent influence of the banks on economic policy. I will return to the lessons for Finland in more detail later, but this article on the Irish economic recovery holds some information. To wit – the choice is either to let (foreign) banks run the economy (like in Latvia) or big MNC’s (like in Ireland).


Is Ireland really a success of Austerity policies? – No, says Evans-Pritchard

Is Ireland really a success of Austerity policies? – No, says Evans-Pritchard

“It is of course a fallacy to claim that Ireland’s ability to survive the poisonous 1930s prescriptions imposed by Brussels proves that austerity “works”, and a second fallacy to claim that Spain, Italy, Portugal, and Greece can therefore pull off the same feat.”


Can Spain Achieve What Ireland And Latvia Did?

Can Spain Achieve What Ireland And Latvia Did?

‘Spain would do well to stay clear from the type of reform measures the Commission and the IMF are trying to sell to economies in distress.’

Some, especially in Finland, might find that there is a lot of critical posts regarding Olli Rehn (not as a person, as a representative of a certain set of policies). But please remember: all the talk of ‘recovery’ is extremely premature and in any case how can you call it a recovery when unemployment is so high (and rising in many places). Think of the Netherlands. Think of how things are going in Finland – not the aggregate numbers but the real-life stories of people losing their jobs.


In addition, as Simon Wren-Lewis writes, left- and right-wing extremism is surging thanks to the current politics. In the Netherlands the extreme right/populist Freedom Party as well as the extreme left Socialist Parties are surging in the polls. Also in Finland, especially now the crisis starts to bite, the political success of the True Finn party is virtually guaranteed in the next elections. This I have thought about earlier, and written on the blog here. The recent gallup by the Finnish daily shows that the opposition parties Center Party and True Finns are clearly on the rise, the former would be the biggest and the latter is as big as the National Coalition Party, which leads the current government. The Social Democratic Party is quite a lot smaller in this opinion poll that half a year ago (18,2% to 16,3%).