Finland Could be the Straw that breaks the Camels Back

Looking at the macro picture, the elections scheduled for today in Finland will be closely watched as the country has the potential to jeopardize the Portugal bailout while the G20/World Bank/IMF meetings in Washington are also taking place (we should see some remarks/communiqués out this weekend although there isn't expected to be anything material decided at this event). Finally, there remains speculation that China will move on bank RRRs within the next few days.

Opinion polls suggest that the anti-euro 'True Finn' party will make significant gains. Such an outcome would increase pressure on the next government to take a much tougher line on negotiations currently under way with Portugal.

The reason the outcome of this election is being watched so closely is that Finland's parliament has the right to vote on EU bailouts, such as the one currently being negotiated between Portugal and EU and IMF officials.

And as EU rules state that any bailout must be approved unanimously by all 17 eurozone members, an anti-euro Finnish Government could hold-up the process and further spook debt markets.