Government Proposes to Link Finnish Mark to ECU
Jun. 04, 1991
HELSINKI, Finland (AP) _ The government proposed Tuesday to peg the Finnish mark to the European Currency Unit, and said the mark will not be devalued.
Prime Minister Esko Aho told reporters the decision on ECU linkage reflected the government's intention to tie the Finnish economy more closely to Western neighbors.
''It is the logical continuation of increasing our participation in the economic reconstruction of Europe,'' he said.
The proposal is subject to a vote by Parliament, which is expected to discuss it later this week. Aho said he hoped for legislative approval before legislators begin their summer recess June 15.
The prime minister said the move was prompted by Sweden's decision last month to link its currency to the ECU, and by speculation that Finland would devalue the mark.
''The expectations that came after Sweden's decision, the ensuing instability on Finnish money markets and an increase in interest rates all forced us to a quick decision,'' he said.
Aho said the decision against devaluation was ''very hard and demanding.''
''With this decision, that possibility (devaluation) has been excluded. The main message is that Finland wants to, and aims to, continue with its policies of putting the economy back into shape,'' said Esko Ollila, a director of the Bank of Finland.
Linkage to the ECU would mean that the value of the Finnish mark was determined by EC currencies. The mark is currently measured against a basket of currencies of Finland's traditional trading partners, including the United States and Japan.
The Ecu is now largely used for accounting purposes, but most EC nations want it eventually to become the single currency for the 12-nation trading bloc.