Wall Street Journal
September 5, 2011
It should come as no surprise that the Finns are demanding collateral for the loans they are being asked to make to Greece. Almost five years ago Adam Cohen, then a reporter for this newspaper, reported that the Finns were more than a little annoyed that their painful and successful efforts to conform to euro-zone debt-limitation rules were being flaunted by other euro-zone countries to which the rules "are applied differently." They were even angrier that the eurocracy found time to regulate the Finns' treatment of flying monkeys, a rare species peculiar to Finland, rather than "handle large problems" that might emerge. All in all, by 2006 the eurocracy already ranked lower in the esteem of Finns than of any euroland country.
Now, other euro-zone countries are catching up with the Finns' euroskepticism as they realize how the zone's institutions fail them. The European Central Bank got things exactly wrong when it raised interest rates—twice—just as the euro-zone economies stopped growing. The ECB has temporarily prevented the Greek contagion from making Italy and Spain completely unacceptable to international investors by buying over €40 billion ($56.8 billion) of Italian and Spanish bonds, but it doesn't have the resources to continue that program indefinitely, which unfortunately makes it easier for those countries to postpone the reforms needed to restore growth. Jens Weidmann, president of the Bundesbank, is demanding that the ECB "scale back crisis measures," the precise opposite of what it is doing.
Nor can euro-zone members count on their bureaucrats to do more than create entertainment for serious observers and investors. The Greek rescue plan is unacceptable to many members, with Finland leading the demands for collateral, and German parliamentarians insisting that power follow money—that they have a say on the architecture and magnitude of any future bailout plans. That would prompt other parliaments to demand similar democratic controls on their leaders' ability to give away their money. Such creeping democracy is anathema to the eurocracy.
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