Joint liability | Even the Finnish right wing is now opening the door to a new European collective debt

Major some of the Finnish parliamentary parties see the European collective debt, at least to some extent, as a possible way to finance European defense or support for Ukraine. This is evident from STT’s EU election survey, which surveyed the views of the parliamentary parties before the June elections.

Finland has traditionally taken a very critical view of the common debt of the EU countries. President of Russia Vladimir Putin the decision on a major attack on Ukraine seems to have moved continental plates in the Finnish debt debate as well.

Also some of the right-wing parties are now opening the door to the fact that it could be possible to support defense or Ukraine with a European collective debt.

The Prime Minister’s Party coalition is initially told that the party takes a critical view of the joint debt and wants to find the money primarily from within the EU budget and through other means. After this, however, the answer adds that the party does not rule out the possibility of a new European collective debt.

“The fate of Ukraine determines the fate of the whole of Europe at the same time. Supporting the country and getting the defense industry up and running require significant sums, and for this reason the joint debt taken out precisely to improve the defense and to support Ukraine is not a categorically excluded option,” says the party office’s reply.

Rkp considers even more directly than this, that joint debt can be an alternative for financing Ukrainian or European defense, so that all countries participate in financing European defense and the reconstruction of Ukraine. Liike Nyt also said that it is ready for joint debt.

Political professor of history Juhana Aunesluoma The University of Helsinki considers the change in the debt base of Finnish parties to be significant compared to the 2019 EU elections. He believes that the current situation is pushing Finland and the eastern edge of the Union towards the current thinking of the oldest and largest states in the Union.

“In Germany, it was a really significant turning point at the time of the corona crisis. When the principled decision was made that joint debt can now also be used,” says Aunesluoma.

Traditionally, Germany has belonged to the same group as Finland in its economic thinking.

However, there are still categorical opponents of collective debt in the Finnish party field. Among the parliamentary parties, the Social Democrats, Basic Finns, Christian Democrats and the Center would not be ready for a new joint debt even because of Ukraine or defense.

In its response, Basic Finns considers that other reasons can be found in the background of the joint debt thinking instead of Ukraine and defense.

“The reason why we want to include EU debt is either because some EU countries are not believed to be able or agree to take on more debt, or it is the EU’s effort to transfer decision-making, budget and taxation power to itself under a good excuse under cover.”

The center also does not see the new collective debt as justified, but instead presents the means to expand the financing of the European Investment Bank and the utilization of Russia’s frozen funds in Ukraine support.

Some parties would be willing to accept a joint EU debt to finance Ukraine’s war effort. Picture: ROMAN PILIPEY / AFP

Social Democrats and the Christian Democrats first failed to answer STT’s question about joint debt completely directly. After the follow-up question, the parties were told that they do not support a new joint debt to improve defense or support Ukraine.

The Christian Democrats propose directing funds to Ukraine from already existing financial instruments and funds.

Sdp, on the other hand, would like to channel the European Investment Bank’s funding to the defense industry and explore opportunities for collecting the EU’s own funds through, for example, nuisance taxes, emissions trading fees or taxation of financial markets. In addition, the party would finance support for Ukraine with Russia’s frozen funds and by attracting private capital.

During the euro crisis, Sdp, as the finance minister’s party, stuck to the role of strict EU steward. Among its European sister parties, Sdp represents a very strict side in this matter, Professor Aunesluoma believes.

He considers it uncertain how large sums it is possible to collect with the means presented by Sdp, for example, and what kind of acquisition of own funds would actually be politically feasible. Taxes and payments also easily become permanent income machines, but it is easier to limit the use of debt, he estimates.

Provided should the government end up accepting a new collective debt during the next EU election period, it can expect to receive support from part of the opposition.

The Greens estimate that the EU must significantly increase armed, humanitarian and financial support for Ukraine and at the same time strengthen its own defense.

“This requires significant funds and possibly increases in membership fees. Joint debt should also be in the toolbox if necessary,” the party believes.

The Left Alliance would be ready to defend the joint debt taken to support Ukraine.

“The Union must do everything to support Ukraine’s defense and self-determination. If supporting Ukraine requires taking on debt”, this is how it should be done.