Tuesday, April 19, 2011

Finnish Eurosceptics' election win could halt Portugal's £70bn rescue package - 19th Apr 2011

The crisis gripping the Eurozone deepened yesterday after a hardline euro-sceptic party made sweeping gains in the Finnish general election.

In a move that sent shockwaves across financial markets, the True Finns vowed to block further financial bailouts for struggling nations after seizing one fifth of the votes in the weekend election.

The party’s spectacular rise could derail a £70billion rescue package for debt-laden Portugal, which opened up talks with the International Monetary Fund and the European Commission yesterday.

The Portuguese government’s cost of borrowing hit fresh highs and the euro currency slid amid fears that the True Finns could torpedo the delicate negotiations.

In a further blow for countries in the single currency, the credit agency Moody’s yesterday downgraded the rating of Irish banks to the ‘junk’ category.

This means they will struggle to raise capital and lend money on the global markets.
But the potentially bigger blow came from political developments in Finland.

Previously only a fringe party like UKIP in Britain, the True Finns are vehement critics of the single currency and strongly opposed any financial support for profligate euro-zone members during its election campaign. Read More