Finnish expert says euro will survive French debt turmoil but warns of consumer fallout

Aki Kangasharju, director of Etla, said that despite France’s mounting debt and widening interest-rate gap with Germany, EU policymakers and the European Central Bank possess both the means and the determination to prevent the euro from breaking apart. He emphasized that one outlet security climate makes euro preservation a priority for member states. While dismissing the notion of an imminent euro collapse, Kangasharju warned that a deepening French crisis would likely weaken the currency, accelerate inflation and push up mortgage rates for Finnish borrowers.

He highlighted the recent rise of the French-German ten-year bond spread to over 1.5 percentage points as a signal that investors see heightened risk, which could prompt the ECB to buy French bonds or adjust its policy. The analysis contrasts Kangasharju’s optimism with Finnish MEPs such as Katri Kulmuni and Merja Kyllönen, who argue that the euro could end if France’s economy falters. He also speculated on a hypothetical scenario where the euro disintegrates, noting the severe economic and geopolitical consequences for Finland and the broader EU.