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How to Leave the Eurozone: The Case of Finland

Author

Listed:
  • Malinen Tuomas

    (University of Helsinki, Department of Economics, Helsinki, Finland)

  • Nyberg Peter

    (University of Helsinki, Helsinki, Finland)

  • Koskenkylä Heikki
  • Miettinen Sami
  • Ala-Peijari Jukka
  • Törnqvist Stefan

    (Independent, Helsinki, Finland)

  • Berghäll Elina

    (VATT Institute for Economic Research, Helsinki, Finland)

  • Mellin Ilkka

    (Aalto University, Department of Mathematics and Systems Analysis, Helsinki, Finland)

Abstract

This article provides thoughts and guidelines on how a country could exit from the Economic and Monetary Union (EMU) and its currency the euro. We take the hypothetical exit of Finland as a concrete example. Although there is a way out of the euro for Finland and other member countries, exit would not be easy, nor would its short-term costs be known beforehand with any clear margin. We find the lack of a domestic payments system and uncertainty concerning the redenomination costs to be the biggest risks associated with the cost of Finland’s exit. Still, the costs of Finland’s exit need not be very large, around 10 billion euros in the best-case scenario, but we also acknowledge a very costly scenario for the exit.

Suggested Citation

  • Malinen Tuomas & Nyberg Peter & Koskenkylä Heikki & Miettinen Sami & Ala-Peijari Jukka & Törnqvist Stefan & Berghäll Elina & Mellin Ilkka, 2018. "How to Leave the Eurozone: The Case of Finland," The Economists' Voice, De Gruyter, vol. 15(1), pages 1-16, December.
    • Handle: RePEc:bpj:evoice:v:15:y:2018:i:1:p:16:n:3
    DOI: 10.1515/ev-2018-0020
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    Cited by:

    1. Acocella, Nicola, 2020. "To Exit or not to Exit (from the EMU)?," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 73(1), pages 1-20.

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    More about this item

    Keywords

    domestic currency; euro; exchange rate; payment system;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management

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