[credit provider=”Wikimedia Commons” url=”http://commons.wikimedia.org/wiki/File:Tappi_lets_rip!.jpg”]
There is only one election in the world that matters right now, and that is Sunday’s Finnish parliamentary poll. The rise of the True Finns, and other right-wing parties, has put in danger the current parliamentary majority that backs the Portuguese bailout. And in Finland, it takes a parliamentary majority to pass on any funds through the European Financial Stability Fund. A veto in Portugal would jeopardize the entire bailout.However, according to Societe Generale’s Michala Marcussen, it’s likely to only be a temporary speed bump on the path to a bailout.
Even in a risk scenario where a majority of seats in the Finish Parliament vote against financial assistance for Portugal were to materialise, we consider it highly unlikely that the large euro area member states would just sit back, abandoning Portugal to the markets and risking tumultuous contagion to the rest of the euro area. Delay in securing financial assistance to Portugal would,however, inevitably result in more market turmoil.
Nevertheless, the True Finns rise has the potential to contribute to the nationalist wave that’s starting to sweep over Europe. And while these poll numbers are recent, some others obtained by Der Spiegel suggest the party may get 20% of the vote.
[credit provider=”Societe Generale”]