Finnish Elections Could Trigger Grexit

Finland’s rigid stance over euro zone bailouts could become even more hardline after the weekend’s election, in what would be a further blow to beleaguered Greece as it tries to avert a default.

A parliamentary election on Sunday in the small, northern euro zone state was won by the opposition Centre Party’s Juha Sipila.

He may have to rely on the euro-sceptic Finns Party for support to form a coalition government – a development that analysts say raises risks to the future of the euro area. The Finns Party is against sovereign bailouts and wants to boot Greece from the 19-member euro zone.

Read MoreGreece’s fate hangs in balance amid contagion fear
“Finland was in the anti-bailout camp before yesterday’s election and it’s now likely to take an even harder line towards Greece,” Nicholas Spiro, managing director at Spiro Sovereign Strategy, told CNBC.

While Finland has a land area of over 300,000 square kilometres, its population size is relatively small at about 5.4 million compared with 80.6 million in Germany, 66 million in France and 11 million in Greece.
Spiro added that while the Finns Party was likely to have a prominent role in the Centre-led coalition, other Finnish parties had already toughened their stance towards Greece. According to Finland’s state broadcaster YLE, the Centre Party won 49 seats in the 200-member parliament based on almost 99 percent of the votes, while the Finns won 38 seats.

“When it comes to parliamentary approval for another bailout program for Greece – provided, that is, that Athens and its creditors can reach a deal which, for the time being, looks very unlikely – the Finnish parliament is likely to be even more obstructive than the German one, which is saying something,” Spiro said.

via CNBC

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.