I was on the BBC World Service programme “World Have Your Say” (programme site, blog) earlier to talk about the implications of the election success of Timo Soini’s True Finns party in yesterday’s parliamentary election. The discussion briefly examined the reasons for the support for this populist party, but the main focus was what the consequences will be for Portugal’s ‘bailout’ from the EU, as all 17 Eurozone members have to agree to assistance for Portugal. The BBC has a Q&A about it here, Gavin Hewitt is talking about political earthquakes here, and YLA has a summary of the main parties’ positions here.
But what is this ‘bailout’ actually?
What – importantly – does the image of ‘bailout’ conjure up in your mind? It’s the picture of water being thrown overboard from a leaking ship and – once the water is out – it’s subsumed into the rest of the ocean, lost.
Hence – in political terms – the very image of ‘bailout’ is wrong. It implies that the money (from the Finns in the case of Soini’s argument) will never be returned. But that is not so, as eloquently argued in this blog post by Henning Meyer at Social Europe Journal. Money is being lent, not given, and is being lent at rates at which lending countries will make a profit.
So this is not a bailout for Portugal. It is an emergency loan. That’s an important difference.
December 22, 2007 via Flickr, Creative Commons Attribution