Finland vote may hit Portugal bailout

True Finns quadruple share of vote in Finland elections, as party leader says he expects EU to change Portuguese bailout plans The cost of insuring Portuguese debt against default rose on Monday after a strong election result in Finland for a party opposed to a bailout of Portugal . The True Finns, the anti-euro party, more than quadrupled its share of the vote to 19% and finished a close third in parliamentary elections at the weekend. The party expects to hear later this week about joining talks on forming a coalition, which could turn Finland’s traditionally pro-EU politics on its head. The party leader said he expects the EU to change plans for a bailout of Portugal. “Of course there will have to be changes,” Timo Soini said. Portuguese five-year credit default swaps climbed 26 basis points to 625bps this morning, according to data monitor Markit. The cost of insuring Greek debt also soared after a newspaper report that the country had asked the International Monetary Fund (IMF) and European Union to restructure its debt, although this was later denied by Greece’s finance ministry. Furious Greeks are urging their government to default on its debt as the country struggles to dig itself out of its crisis despite a €110bn (£97bn) bailout. Five-year credit default swaps on Greek government debt surged by 84bps to 1220bps. This means it costs €1.22m to protect €10m of exposure to Greek bonds. Irish and Spanish credit default swaps also rose. It remains unclear to what extent a new coalition, which could take weeks to form, will incorporate True Finns’ ministers or their views on EU support for heavily indebted member states. But the rise of the True Finns seems likely to shift the debate. “This is a big, big bang in Finnish politics. This is a big, big change. This will change the content of Finnish politics,” Jan Sundberg, a professor at the University of Helsinki, told Reuters. Unlike others in the eurozone, Finland’s parliament has the right to vote on EU requests for bailout funds, meaning it could hold up costly plans to shore up Portugal and bring stability to debt markets. The strong showing for the populist True Finns reflects growing public frustration in some EU states about footing the bill for weaker economies such as Greece, Ireland and Portugal. Dominique Strauss-Kahn, the head of the IMF, said at the weekend that Europe needed to come up with a more coherent plan to deal with government debt following the bailouts of Ireland and Greece. He criticised piecemeal attempts to resolve individual countries’ debt problems. He also criticised Britain’s refusal to support a funding package to tackle the eurozone crisis. European debt crisis Europe European Union Portugal Financial crisis European banks Global recession Europe Julia Kollewe guardian.co.uk

Posted by on April 18, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.