Finland Shifts Stance on EU Joint Debt Amid Growing Defense and Ukraine Support Needs

As the United States grapples with the turbulence following the rise of a new administration, the European Union's role in supporting Ukraine is becoming increasingly significant. For this reason, the Finnish government is shifting its stance on EU joint debt, becoming more favorable toward it—provided it is used specifically for aiding Ukraine and strengthening collective defense.

As a sign of this shift, Prime Minister Petteri Orpo (National Coalition Party) reiterated this position on Monday upon arriving at an informal EU defense meeting in Brussels. According to him, the guiding principle of joint debt should be that investments in defense must be based on necessity and threat assessments.

To clarify his stance, he stated that “those funds should be used where Europe is being defended. In that case, Finland must clearly be among the beneficiaries.”

Additionally, Finland, along with nearly all EU member states, proposed that the European Investment Bank (EIB) should increase its financing for the European defense industry. In practice, this would mean reassessing the EIB's so-called "excluded sectors" list to align with the EU's current political priorities. This adjustment would allow the EIB to finance traditional defense industries in the future.

One point of contention has also been where defense procurements should be made. As always, France—keen to favor its domestic industry—wants EU defense acquisitions funded by joint resources to be sourced from European markets.

However, Finland’s prime minister noted that Europe’s defense needs are so vast that there will be enough demand to support both France’s and Finland’s defense industries. Furthermore, he emphasized that it would neither be reasonable nor even possible for the EU to detach itself from the United States, given that American defense systems are highly advanced and will continue to be necessary.

It remains to be seen whether Orpo’s well-argued positions will gain traction within the Union. At present, Hungary and Austria oppose them, and many other countries—such as France—are waiting for more details before taking a final stance.

That said, Europe does not have the luxury of time. Decisions must be made immediately regarding Ukraine and, as soon as possible, to enhance the EU’s overall defense readiness. At the same time, efforts must be made to prevent the trade war threatened by Donald Trump from disrupting transatlantic economic and technological cooperation—or, more critically, NATO’s ability to operate effectively wherever necessary.

Previous thoughts on the same topic:
Finland and the USA: Strong Allies with Shared Interests or a Trade Dispute?
Finnish Minister Riikka Purra: “Putin Is a War Criminal, an Aggressive Imperialist”
From Finland to Olaf Scholz: The Imperative of Supporting Ukraine's Independence instead of its Finlandization

The Fairness of Climate Funding: Just Another 60 Million Euros?

According to Finland's public broadcaster Yle, the financing of climate action is increasingly shifting onto the shoulders of EU countries. This is because the Trump administration is unlikely to be enthusiastic about participating in the whole effort, while China and former developing countries enriched by oil want to continue as recipients of funds rather than contributors.

China and the G77 group of developing countries have also proposed a new target for climate financing. According to their proposal made in Baku, Azerbaijan, a staggering $1.3 billion should be allocated.

It remains to be seen how the EU will respond to this emerging situation. Will it continue humbly to keep its purse open, or will it declare the situation unfair and therefore unfeasible?

In any case, Finland’s government has already decided to reduce its contribution to the green climate fund from 100 million euros to 60 million euros. As a Finnish taxpayer, I believe that if China and the G77 continue along the line they've currently set, that amount should be further reduced by another 60 million euros and the saved funds used to curb the national debt, even though that, too, may be but a drop in the ocean.

Previous thoughts on the same topic:
Russia Pays the Price for Its Foolishness
Correct minister, ridiculous facts
Advice to participants of the COP27 climate implementation summit

A National Rally election victory does not mean that France will become like Finland under the Finns Party

The result of the first round of the French elections met expectations. This indicates that the residents' frustration with the current immigration policy and its consequences is now becoming a reality.

An example of these consequences was seen when an attack occurred at a wedding of Turkish background individuals in Thionville, France, where a group armed with assault rifles killed one and injured several people. The incident is reportedly linked to gang conflicts involved in drug trafficking.

If and when such events – and similar ones – occur repeatedly, it is understandable that people accustomed to European order are dissatisfied and thus desire the change offered by the National Rally.

* * *

A Finnish journalist outlined four consequences of the election results. The first, according to her, is the reduction of France's support for Ukraine. This would mean a small victory for Vladimir Putin's Russia and is starkly opposed to the strongly pro-Ukraine stance of Finland's immigration-critical Finns Party.

The second issue the journalist mentioned that can be expected to change in France is the populist economic policy of the National Rally, which threatens to drive the country into an even deeper debt crisis. This is also a significant difference from the Finns Party, which has pushed for strict economic policies in government, causing the political left in opposition to resort to populist outcries.

The third potential change highlighted by the Finnish journalist was France's refusal to pay its membership fee to the EU. This would obviously have a massive impact on the entire Union, potentially pushing it back towards being a pure trade alliance. This would fit well with Finns Party's immigration-critical and EU-critical stance.

Finally, the journalist mentioned that the EU would become more value-conservative. This would mean not only stricter immigration policies but also a more conservative approach to sexual deviations and abortions.

In this respect, the relationship between the immigration-critical parties in France and Finland is not straightforward. In Finland, practically everyone supports the right to abortion, but many immigration-critical individuals view the hype around sexual deviations negatively.

* * *

As my esteemed reader noticed, the message of this blog post is that although the immigration policies practiced across Europe have led to the emergence of large immigration-critical parties in both Finland and France – and many other countries – this does not mean that European politics is changing in all other respects.

This is particularly evident in these parties' relations with Russia and economic thinking, but also in many other aspects. Therefore, no hasty conclusions should be drawn from the first round of the French elections.

Additionally, it must be remembered that an unholy alliance is forming in France between Macron supporters and the left, which, if successful, could prevent the rise of the National Rally to power and thereby block the rise of the immigration-critical Gauls for another term.

Previous thoughts on the same topic:
The future of all Europe is at stake
Swedish-Somali Offspring, Penalties, and Our Country's Attractiveness Factors
Mass immigration is the greatest concern for EU youth

South Africa: life without a culture of maintenance

South Africa is an interesting anthropological and cultural subject of study. The country's economy was in excellent shape when the white minority rule transitioned to black majority governance.

For this reason, I have occasionally written (in Finnish) about the events in the country. And today, I will do so based on an Al Jazeera article about the situation in the country.

According to the "Pravda" of the Arab world, South Africa has had uninterrupted electricity distribution for 57 consecutive days, which is the longest continuous period in over two years. This is significant because, last year, power outages caused losses of up to 51 million dollars per day due to the closure of factories, offices, and shops, according to the country's central bank.

However, electricity problems are not the only challenge in this country of 62 million people. Decades of neglect in infrastructure maintenance and investment have also led to the deterioration of transportation networks and water supply. This may result in the African National Congress (ANC), which has been in power since 1994 – the end of apartheid – losing its parliamentary majority in next week's elections, according to opinion polls.

South Africa has a large public electricity producer, Eskom, which mainly operates outdated and poorly maintained coal power plants. These plants have also suffered from coal and copper thefts as well as corruption. As a result, President Cyril Ramaphosa had to declare a state of emergency last February, with power outages stretching up to 12 hours a day.

Since then, private investments in wind and nuclear power have emerged in South Africa, resulting in the private sector now producing about a third of South Africa's electricity. This partly explains the recent reduction in power outages.

Power outages have also prevented water treatment plants from using their pumps, leaving people without potable water. Additionally, according to Johannesburg's water utility, nearly half of all pipeline water is lost to leaks. This means 70 million liters of drinking water are wasted every day. The reason is the high age of municipal distribution systems: in Johannesburg, for example, they were designed between the World Wars.

Water utilities are also vulnerable to vandalism. Thieves take everything from metal parts to pumps and sell them onwards. And there is no such maintenance culture for infrastructure in South Africa as in Western countries. Even if there were, water utilities struggle to generate revenue because people cannot afford to pay.

South Africa's water situation might be helped by transitioning to a private water distribution system, similar to electricity. The same applies to South Africa's state-supported railway company, which has also been plagued by poor management and corruption allegations.

Last year, the dilapidated railways caused economic losses equivalent to up to 6 percent of the gross domestic product in 2023, according to the country's Ministry of Finance. And that's not all, as the public railway company recently warned that it cannot service its debt of 130 billion rand (7.2 billion dollars) without direct state aid. Therefore, President Ramaphosa has also hinted at the possibility of privatizing the rail transport sector.

* * *

Next week, South Africa will hold elections in a situation where the infrastructure is failing, and in addition, a third of the entire population and nearly half of all young people are unemployed, 56 percent of the entire population lives in poverty, and economic growth is non-existent (with a forecast of 0.9 percent growth for this year). At the same time, crime rates and corruption scandals are daily occurrences.

Last year, the country's debt-to-GDP ratio grew to 74 percent (in Finland, it's 75.8 percent!), and the current government has to use more than a fifth of its tax revenues to pay interest on the debt. This diverts money from other sectors – such as education, healthcare, and infrastructure.

Therefore, unemployment in the country needs to be reduced to increase revenues. Consequently, the next government – regardless of its composition – should focus on stimulating the economy and creating jobs. This could be achieved by offering incentives for private infrastructure investments, which would positively reflect on the country's export industry and other businesses.

It remains to be seen whether South Africa can rise from the decline it has been on for the last decade and a half under the ANC-led centralized economy. Or will its fate be to sink into a typical backwater of black Africa, where nothing works except corruption and crime?

Previous thoughts on the same topic: Should forbidden questions be answered or not? Corruption in Nigeria may affect Europe They want to wipe out from Finland what is good for Africa

Finns are backing the government making difficult decisions

The problem commonly associated with democracies is that when the government has to make unpleasant decisions for public finances, voters tend to shift their support to the opposing parties. Thus, there is a temptation for leaders not to make economically sound decisions while in power.

In this sense, the situation in Finland is interesting. The right-wing government that came to power last summer has planned labor market reforms, cuts to public services, and reductions in income taxes to balance the state budget, which was heavily indebted during the previous government's term, and to revitalize economy.

These plans have resulted in widespread and ongoing political strikes opposing the reforms. Both trade unions and green-leftist parties are behind these strikes, and even according to citizen surveys, the protests have public support.

However, what makes the situation interesting is that in polls measuring party support, the government's popularity has not declined; instead, it is clearly on the rise. Based on this, it seems that Finns understand that their country's public finances are indeed in need of correction. Therefore, rather than abandoning the parties in power, they are actually shifting towards supporting them.

This bodes well for Finland's future, but of course, only if the ongoing changes by the government lead to results and the public remains supportive for long enough for the economy to turn back towards growth.

Previous thoughts on the same topic:
Correct minister, ridiculous facts
The people long for strict economic policy
Reducing taxes, enhancing export and paying the governmental debt

The European Commission appears unreliable as a decision-maker to the Finns

In Finland, it is customary to trust a person's word, whether it be a man's or a woman's, once it has been given. Therefore, a person who goes back on their word is considered unreliable.

This cultural characteristic has contributed to making Finnish society quite functional in many ways, despite the fact that there are many unreliable individuals also in Finland.

That is why it was interesting, but unfortunate, to read about how Commissioner Jutta Urpilainen (Social Democrat) lightly approached the promise that the EU made when establishing the European Union Recovery Instrument. That is, the promise that the EU would no longer take on shared debt.

The article mentioned that Finland has been opposing the mentioned EU sovereignty fund. According to the article, it could be established either with debt financing or by granting the Union new types of fundraising possibilities - in plain language, some form of taxation authority.

So far, Finnish political parties have been quite united in this matter, likely due to the influence of negative public opinion. It remains to be seen what kind of operation the EU propaganda machinery will embark on to change it - as the article in question seems to ultimately address this issue.

In the article, Urpilainen also brought up another point. According to her, Finland's decision-making concerning EU matters should be altered to enable more proactive influence.

Regarding this matter, it is likely that all Finns can agree, to some extent, that Finland should indeed allocate resources to proactively influence EU decision-making. This is necessary to counteract decisions that could be harmful to both Finland and the entire EU, ideally at the earliest possible stage. However, it is important to acknowledge that each influencer or lobbyist operating in Brussels contributes to indirect costs associated with the EU, thereby increasing the financial burden on our national economy and that of other countries within the EU.

Therefore, the most crucial EU matter for the upcoming Finnish government this year is to exert influence on all EU member states to ensure the selection of competent individuals capable of making sensible decisions as commissioners. This is crucial to prevent future catastrophes similar to the von der Leyen Commission, which consists primarily of politicians who had largely failed in their national political careers.

Previous thoughts on the same topic:
Finnish Prime Minister Sanna Marin is quickly losing her national credibility
Fair policy will build a strong Union
Will an attitude lead Ukraine into EU?

The Guardian misleads its readers

The internationally acclaimed Prime Minister of Finland, Sanna Marin, has decided to step down as the leader of the Social Democratic Party of Finland. At the same time, she announced that she will not seek a position as a minister in the upcoming government or run for president.

I have previously expained that despite her international success, Prime Minister Marin has been an inadequate leader. While she is certainly able to present herself convincingly, in the last few years she has been unable to maintain Finland's economy in good condition. Additionally, she has displayed inappropriate behavior by attacking her coalition partners and encouraging voters from other left-wing parties to vote for her own party.

Therefore, it was incomprehensible that the Guardian got excited about writing about Finnish misogyny in Marin's case. If this were the case, could the top three candidates in the elections have been women, or not?

It remains to be seen what kind of government will come to Finland in the coming years. However, it is clear that the voters did not want a new left-wing government: after all, the environmental and left-wing parties only received a third of the votes. And the same amount of seats in the Parliament.

Therefore, it would be appropriate for Finland to have a government that represents the will of the people, with the two largest winners of the election, namely the National Coalition and the Finns Party. It should also be noted that the latter party is not associated with the right-wing ideologies of the parties in the 1930s as insinuated by the Guardian. Instead, it is a conservative and market-oriented popular movement.

Previous thoughts on the same topic: 
Finnish Prime Minister Sanna Marin is quickly losing her national credibility
Elections in Finland enlight journalistic views
A notable difference between Social Democrats in Sweden and Finland

Reducing taxes, enhancing export and paying the governmental debt

Finland is a small country with a relatively high standard of living. According to a new report, that is largely paid by the efforts of export industry.  

The report points out that "contribution of the export industry to the Finnish national economy is approximately 47 per cent of the value added and approximately 42 per cent of the employed. In terms of taxes, the impact is approximately one third of the total tax revenue."

The report also lists elements necessary for the future success of export industry. They need a lot of new talent i.e. sufficient number of competent experts, courage to be creative by increasing research, development and innovation as well as long-term industry policy ensuring competitiveness for themselves. 

I do not claim against the report. It will, however, be interesting to see how the Finnish political apparatus will respond to the needs of its industry. During the last years it has only succeeded to ruin the public economy by spending considerably more money than taxes and other incomes would have allowed. And therefore the government debt has increased from 106 billion euros in year 2019 to 129 billion euros in 2022. 

The interests of that burden alone are estimated to triple in this year to 2,4 billion euros. To be covered by Finnish tax payers for nothing. 

Fortunately, this reality is well understood by the ordinary people. According to a recent opinion poll only 18 percent would like to cover public spending by additional debt instead of reducing public spending. And to improve the operating conditions of companies.

The next elections of the Finnish parliament will be in April. The opinion polls suggest that the two most popular parties will be Conservatives and True Finns. Both of which have promised to reduce governmental budget. In other words, people are now looking for a change to the current left wing government led by the beautiful prime minister Sanna Marin of Social Democrats. 

Taken together: next summer we will see, whether Finland will have a government program improving operating conditions of export industry, reduce governmental debt and retain the best parts of the Nordic welfare society so, that the political left will not make a comeback in elections 2027 to return the country back to the harsh economic position it is right now.

 

Previous thoughts on the same topic:
Fair policy will build a strong Union
A notable difference between Social Democrats in Sweden and Finland
The beautiful PM of Finland has driven herself into a trouble