Finnish doubts about EU bailout politics expressed loudly and frequently

It was a bucolic lakeside scene yesterday at the official residence of Finland's youthful prime minister, Yrki Katainen.

Sporting a green tie and hankerchief Mr Katainen used a press conference - held outdoors beside the state residence’s sauna - to praise Ireland’s “excellent job” in implementing painful crisis reforms to regain confidence.

But compliments are not hard currency in politics and, over lunch talks, Taoiseach Enda Kenny was no doubt reminded what few realise: in the euro crisis, the Finns are often more German than the Germans themselves.

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From left: moderator Peter Spiegel, Taoiseach Enda Kenny, Greek prime minister Antonis Samaras, Latvian prime minister Valdis Dombrovskis and Finnish prime minister Jyrki Katainen at the Economic Ideas Forum in Helsinki yesterday. Photograph: Reuters/Markku Ulander/Lehtikuva

Berlin’s rescue reticence in the crisis is well-known and well-documented but, behind the bluster, there is no serious opposition to Chancellor Angela Merkel’s politics.

It is a very different matter in Finland, a staunch and hardline German ally throughout the crisis. Across Finland's political spectrum, from the opposition into the government benches, doubts about EU bailout politics are expressed loudly and often.

Today, like Berlin, Helsinki is far from enamoured with Ireland’s current ask: allowing the ESM bailout fund recapitalise banks propped up with Irish public money in the early days of the crisis.

Mr Katainen warned yesterday that à la carte recapitalisation could empty the bailout fund and cause the euro crisis to flare up again. A second concern is whether such a move might violate Finnish constitutional provisions on debt sustainability.

Behind the scenes, Finns concede that outright rejection of Irish recapitalisation hopes last autumn -- expressed in a blunt statement by Dutch, Finnish and German finance ministers -- has now given way to quiet pragmatism.

The Finns could live with a compromise on legacy debt in the future, but it will not be on the "game-changing" scale Dublin and other capitals hoped for last June, and it will not come before Ireland's planned return to financial markets. The feeling in Helsinki is that recent bailout concessions to Ireland are more than enough for now.

In public, Finnish tough-talking on bailouts are motivated by domestic necessity and historical experience.

When Finland experienced its own economic and banking crisis in the early 1990s, it had yet to join the EU. Out on its own, it imposed radical reforms and bounced back to currently rude health without assistance from its neighbours.

Combine that with Finland’s relative late entry to the EU in 1995 and you have a common attitude that crisis countries, particularly in the south, should help themselves.

Tapping into these attitudes with startling success is the populist, anti-bailout True Finns party.

Polls put the True Finns one point behind Mr Katainen’s Centre Party and one point ahead of finance minister Jutta Urpilainen’s Social Democrats.

Perceived as too accommodating to crisis countries around Europe, they face political ructions at home.

Yesterday in Helsinki, top Finnish officials insisted that Berlin is not a lonely hegemon vetoing one crisis solution after another. Behind closed doors in Brussels, the Finns admit they are often are more hard-line than Germany. In mapping Ireland's exit from its bailout into the brave new Europe, it's crucial to look beyond Berlin to Helsinki.