After the UK vote in favor of the Brexit, panic seems to emerge on the Finnish economic playing field: according to YLE, on the first day of trading on the Helsinki Stock Exchange since Thursday’s vote, shares sank about six percent after the opening bell, at its lowest level in five years. Outokumpu, Metsä Board, Wärtsilä, Cargotec and Konescranes, Sampo, Nordea and Nokia dropped still more. And the Finnish Parliament announced it will reconvene in a special session on Friday to consider the repercussions of the British vote.
In reality, from an economic point of view, Finland has little to lose as demonstrated by Standard and Poors’ Financial Services has published a Brexit sensitivity index for countries. Finland, compared to other EU countries, has very little exports to UK (1,6% of GNP), a very low financial risk, very low foreign direct investments in GNP, and very low migrations to and from UK compared to its population. And an extremely small number of British tourists. For this reasons, it is very far from being a member of the Brexit danger club, according to Bloomberg (the danger club includes Malta, Cyprus, Ireland, Lithuania, Poland and Latvia.
However, Finland has to face political risks. The first is internal, with people led by Timo Soini and his party: they are already asking for a referendum, but in the present situation there is no majority to leave the EU. But there is also an external one, as Finland may have to make quite rapidly a choice, between following the founding members of the EU (Germany, France, Italy, Netherlands, Belgium, Luxembourg) , who have met on Friday and are pushing for more integration and a more federal EU, and the others, for the moment led by Poland, who were generally UK allies in the EU to block more integration and more social regulations. The problems for this group of rebels is that they are mainly the ones on the receiving end of the EU budget, and leaving the EU would mean abandoning this money coming mainly from the founding members, so there is practically no chance that they stay rebels very long.
The question for Finland, but also for Sweden and Denmark, a traditional British ally, is to know if they are ready to follow the founding members, or if they would prefer to follow the UK and leave the EU. As they don’t have the UK’s economic strengths, leaving the EU is quite risky for their economy and their finances. If the population does not want to follow the founding members’ will to go towards an integrated EU, they could push them to go for what is called enhanced cooperation: for the moment, it is a procedure where a minimum of 9 EU countries are allowed to establish advanced integration or cooperation in an area within EU structures but without the other EU countries being involved. This allows them to move at different speeds and towards different goals than those outside the enhanced cooperation areas. But it is not sure that this would be accepted by France and Germany.
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