"Nationalism" is a frightening word after some of the atrocities of the 20th century, but it's going to begin growing across Europe and other parts of the globe. Like any political umbrella, there are many special interests to the new wave of nationalism, but it really centers on the notion that people want to preserve a way of life.
What threatens a nation's way of life? Without a doubt, going broke can change things. It's one thing to go broke from your own financial misdeeds and fortunes, but another to go broke paying for the mistakes of others. This is the battle that is going on in Europe, and will be the centerpiece of the 2012 elections in the U.S.
Last night, as expected, the True Finns political party won a giant chunk of seats in Finland's national election. The party now has 39 seats, up from just six seats. The party is part of a continent-wide wave of Euroskeptics that believes the goal of a string of nations with a single currency is a mistake. People are flocking to these movements in droves because they see not only financial danger in a scheme that removes so much sovereign power of self determination, but also cultural threats. Finland is a small but proud country of less than six million people; if it opens its borders and coffers to central planners out of Brussels, its own identity could be lost forever.
Now, people there want to determine their own gun rights, think the government should pay for art other than art that promotes the nation and its artists, and would like to slow immigration. More than anything else, to achieve these things the True Finns want to get out of the EU.
Citizens there are jumping on the bandwagon. They abhor the profligate ways of other members of the EU that have needed bailouts. Keep in mind, Finland is one of only six European nations with a AAA rating. It's a welfare state, which makes it very attractive to immigration, with a heavy tax burden. The True Finns can live with the taxes but can't live with those funds going to support Europe's "squanderers" and "bad deals" like the bailout of Portugal.
This morning, Europe is under pressure:
- Moody's has downgraded Irish banks to junk status.
- Greek 10-year yields have surged to 13.936%.
- Spain auctioned €4.60 billion in debt, far below the €5.50 expected and at much higher yields (€3.5B 1-yr @2.77%; €1.1B 18-month @ 3.36%).
Finland's tax burden represents 43.2% of the nation's GDP:
Top personal rate 30.5%.
Municipal rate 16.5% to 20.0%.
Church rate 1.0% to 2.0%.
Top Corporate rate 26.0%.
VAT (upped in July).
Capital gains tax 28.0%.
True Finns has its roots in rural Finland, and rejects the Kyoto treaty and climate change laws. In fact, it's absurd that the Green political party has made such inroads in a country that is covered in a mountain of snow 25% of the year. But they are smart enough to understand there are many ulterior motivations of the Green party. One of the more charismatic right-of-center leaders in Finland was sued by the Green party for blasphemy -- of Islam. So, just as the Tea Party in the U.S. has been branded racist, so too are the True Finns and other nationalist groups -- but it's a weak charge, and misses the point that a line has to be drawn in the sand.
It is preposterous that overtaxed Finns should have to bail out Portugal, Greece, Ireland, and/or other nations such as Spain. Even the Social Democrats of Finland, while not opposed to helping a bailout, think the terms must be renegotiated. Also, over the weekend, Molotov cocktails flew and flames went unchecked as demonstrations spread across Greece over adhering to austerity measures. Many Greeks refuse to pay higher tolls and public transport ticket prices, along with other measures needed to comply with the loans that bailed them out.
Just as the political narrative is shaping up in America where workers and job creators are painted as mean-spirited and evil, so too in elite and media circles in Europe will movements like True Finns be described as menacing, evil, and dangerous while those that wasted opportunities and legacies of achievement will get all the pity. The person that goes to work in what must feel like a perpetual winter is not compassionate, to borrow a phrase from President Obama, while those that just wasted decades on the beach get to demand a soft landing. Somehow the media makes it work; Molotov cocktail throwers are the "victims" and border-protecting Finns are their oppressors.
Maybe the media isn't swaying public opinion despite tainted coverage because the True Finns won. There are other movements looking at national pride, rule of law, and self-determination from the UK Independence Party (UK), Order and Justice (Lithuania), Reformed Political Party (Netherlands), and Movement for France, to name a few.
Finland could possibly veto Portugal's bailout package, sending markets into disarray. I suspect at some point other members of the EU will come up with Finland's portion of the deal, which is $11.0 billion and climbing -- but this election is a shot that should be heard around the world.