The Victory of the True Finns – Time to Attack the Bailout Myth

The European political scene is shaken today by the election victory of the right-wing True Finns who gained unprecedented support in yesterday’s election. I was on Al Jazeera English late last night to discuss the result:

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To my mind, Europe’s mainstream parties are to a significant extent to blame for the continued rise of such protest votes because they simply do not communicate what is really going on.

It is a widespread myth for instance that the European bailout fund is giving away money for free to countries such as Ireland and Greece. This is simply wrong! The ‘bail-out’ is a lending facility that lends money at rates with which the underwriting countries will make a profit if the debtor countries do not default. This is far from giving away money for free from presumed ‘responsible’ countries to ‘irresponsible’ countries to support their luxurious lifestyle.

The fiscal position of Ireland for instance was very strong before the crisis. The country has been hit hard as its (erroneous) growth model based on unfairly low corporation tax, a property bubble and a poorly supervised and irresponsible banking sector collapsed.

A large share of Ireland’s public debt is for instance nationalised bank debt that the bail-out helps to service – with the major creditors being based in London, Frankfurt and elsewhere. Get the point?

These bail-outs look much more like a stabilisation programme for major European banks than anything else by socialising the investment risk they took on without and honest and transparent discussion that this is what is going on. And most European mainstream parties continue their smoke and mirrors communication strategy on this matter.

In such circumstances it is no wonder that European voters are disgruntled, feel betrayed and are susceptible to radical parties. If the political mainstream doesn’t get its act together I am afraid we will see more such election results or new party formations – such as the much feared creation of a new influential party to the right of the German conservatives. It is high time to act and break out of the current politics! The future of the European Union is at stake!

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