Finland would prefer to leave Eurozone than pay other countries' debts

The Telegraph reports that according to the Finnish Finance Minister, Finland would prefer to leave the Eurozone than pay other countries' debts.  This seems perfectly reasonable when one considers that there is an alternative of using the modern banking system for what it was design for and having the banks absorb the losses on the excess debt in the financial system.

So the choice is: taxpayers and bankers pay themselves bonuses or the banks and the bankers go without bonuses.

This is the very definition of a very, very difficult choice for elected officials, central bankers, economists and financial regulators everywhere:  Screw the taxpayers or reduce the bankers' take home pay?

Finland would consider leaving the eurozone rather than paying the debts of other countries in the currency bloc, Finnish Finance Minister Jutta Urpilainen has said. 

"Finland is committed to being a member of the eurozone, and we think that the euro is useful for Finland," Ms Urpilainen told financial dailyKauppalehti, adding though that "Finland will not hang itself to the euro at any cost and we are prepared for all scenarios". 

The finance minister stressed that Finland, one of only a few EU countries to still enjoy a triple-A credit rating, would not agree to an integration model in which countries were collectively responsible for member states' debts and risks. 

She also insisted that a proposed banking union would not work if it were based on joint liability. 

"Collective responsibility for other countries' debt, economics and risks; this is not what we should be prepared for," Ms Urpilainen said.

Particularly when Finland is familiar with the Swedish model for handling a bank solvency led financial crisis.  Under this model, banks absorb the losses on the excesses in the financial system today and rebuild their book capital subsequently.

Ms Urpilainen acknowledged in an interview with the Helsingin Sanomat daily that Finland "represents a tough line" when it comes to the eurozone bailouts. 

"We are constructive and want to solve the crisis, but not on any terms," she said. 

As part of its tough stance, Finland has said that it will begin negotiations with Spain next week in order to obtain collateral in exchange for taking part in a bailout for ailing Spanish banks.