Ovi -
we cover every issue
newsletterNewsletter
subscribeSubscribe
contactContact
searchSearch
Resource for Foreigners in Finland  
Ovi Bookshop - Free Ebook
Ovi Greece
Ovi Language
Murray Hunter: Essential Oils: Art, Agriculture, Science, Industry and Entrepreneurship
The Breast Cancer Site
Tony Zuvela - Cartoons, Illustrations
Stop human trafficking
 
BBC News :   - 
iBite :   - 
GermanGreekEnglishSpanishFinnishFrenchItalianPortugueseSwedish
Finnish report Finnish report
by Euro Reporter
2012-08-14 11:06:22
Print - Comment - Send to a Friend - More from this Author
DeliciousRedditFacebookDigg! StumbleUpon
Pleased with Moody's confirmation

Finland's finance ministry said Tuesday that it was "very pleased" with the confirmation of the country's AAA rating by Moody's Investors Service, which has left it the only euro-zone member to have a top rating backed by a stable outlook according to the rating firm. "This is a positive sign of confidence by the ratings agencies in how Finland is managing its economic policies," said Mikko Spolander, financial adviser at the country's Ministry of Finance.

Earlier, Moody's said it was maintaining Finland's AAA rating with a stable outlook, citing the small Nordic state's strong economic position and management of its public finances. At the same time, Moody's cut the outlook to negative for other strong euro-zone economies, such as Germany and the Netherlands.  However, despite the strong endorsement by the rating firm, Mr. Spolander said Finnish finance officials were still aware of the external risks faced by the country. He added that the same factors cited in the decision to downgrade the outlook for Germany and the Netherlands also posed a threat to Finland. "We are very export-oriented and any negative developments in the euro area would affect Finland, so we can't be too complacent," he added.

The rating confirmation comes after Finland reached a collateral deal with Spain in exchange for its contribution to a €100 billion ($121 billion) European Union bailout of Spanish banks. Although small, Finland has been considered key to anchoring the credibility of EU bailout loans, along with economic powerhouses such as Germany, because of its superlative credit rating and history of prudent fiscal management and strong economic performance. Moody's affirmation of the country's top credit rating makes it easier and cheaper for the government to borrow because of the perceived low risk of it defaulting on its debt.

***************************************************

Finland rejects talk of euro exit after backing Spain rescue

Finnish Prime Minister Jyrki Katainen dismissed speculation his government is considering dropping the euro should the debt crisis deepen after the Nordic nation’s parliament agreed to back a Spanish bank bailout.  “We will not and do not consider exiting the euro,” the premier said today in an interview in Helsinki. “We want to be at the heart of European development. A stronger euro, a better euro is the only, and reasonable, thing for Finland.”

Finland’s demand that bailouts come with strict terms such as austerity and burden sharing, coupled with Katainen’s rejection of common bonds, has prompted economists including Nouriel Roubini to suggest the nation may ultimately quit the euro in protest.

The northernmost euro member today sanctioned the Spanish bailout, as parliament interrupted its summer break for the first time in 50 years to guarantee a part of Spain’s 100 billion-euro ($122.6 billion) bank rescue. Finland, one of four remaining AAA rated euro nations, this week reached a deal with Spain to get collateral for its guarantees, signaling it’s prepared to back the bloc as it strives for more integration. Euro area finance ministers also gave final approval today to the Spanish assistance, paving the way for the European Financial Stability Facility to raise 30 billion euros to be held in reserve for the banks, which will be able to receive payments after submitting approved restructuring plans.

***************************************************

Katainen rejects bank license for ESM

Finnish Prime Minister Jyrki Katainen said his government rejects proposals to give a banking license to the euro region’s planned permanent financial backstop, Germany’s Der Spiegel magazine reported, citing an interview.

Finland is critical of plans to buy government bonds in the secondary market to push yields down, Katainen told the magazine. Bond purchases by the European Central Bank have only brought short-term relief, he was cited as saying.

Bond buying in the primary market could be part of a “sustainable solution” and sales of covered bonds, backed by state assets, may help troubled euro members bring their refinancing costs down, he said.



         
Print - Comment - Send to a Friend - More from this Author

Comments(0)
Get it off your chest
Name:
Comment:
 (comments policy)

© Copyright CHAMELEON PROJECT Tmi 2005-2008  -  Sitemap  -  Add to favourites  -  Link to Ovi
Privacy Policy  -  Contact  -  RSS Feeds  -  Search  -  Submissions  -  Subscribe  -  About Ovi