Could a Finnish exit trigger the end of the euro?

Matthew Lynn, chief executive of the London based consultancy Strategy Economics, thinks that Finland´s exit could be the trigger breaking the eurozone in its present form:  

But here’s how it might come to a head over the summer: a “Spanic,” followed by a “Quitaly,” followed by a “Fixit.” A fresh panic in Spain might be followed by rising demands for Italy to quit if it doesn’t get the same terms its fellow Mediterranean country has been offered, followed bya Finnish departure from the euro that might finally bring the whole saga to a climax. 

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Finally a Fixit (for a Finnish exit). The crisis will finally come to a head when one country decides to get out. Finland is the most likely. Why? Because it is a small nation with a strong economy. It is easy to head for the door. Finland would be better off on the first day, just as Estonia was when it decided to leave the ill-fated ruble zone created after the collapse of the old Soviet Union. It doesn’t particularly have to worry about the impact on the European Union, in the way that Germany would if it opted out. If a country such as that leaves, it is effectively game over, but no one can really say that of a tiny place such as Finland. And it has a strong anti-euro political grouping; the True Finns scored well in the last election and may well improve their position in the polls.

Finland is already demanding collateral for its portion of the Spanish loan. That could well turn into a deal-breaker — no collateral, so we’re out of here. Once one country leaves, it is much easier for the next to leave, in much the same way as it is easier to be the second person to leave a really bad party than the first.

A Finnish exit will be the trigger for the single currency to either be taken apart, or else for a smaller euro zone with fewer countries and tighter rules to be created. Either way, it would bring the crisis to a much-needed resolution.

Read the entire column here

A Finnish exit would indeed be welcome, but whether the current Finnish government - which so far has been very pro euro - will have the courage to go for it is another matter.