Country: Committee: Topic: Delegate Name: Delegate School:

Finland ECOFIN - Economic and Financial committee Sovereign Debt Crises Anyela Nieto Universidad Catlica Andrs Bello Guayana

An epidemic strikes deep into the world economy, especially in developing countries, was initially seen as a mortgage crisis spread to the credit sector and led to recession in many Europeans states. There is not denial that the crisis stems from the massive failure of regulation, oversight, risk measurement and governance frameworks of the most advanced countries in the world; the impact on the global economy is significant. Latin American countries does not escape from its effect, a shown of this was the 2002 Argentinas sovereign debt default, and the 1999 devaluation of Brazilian real.

Transmission channels for Latin America and Mexico are different. The main channel is the slowdown in international demand, for Latin American region the blow will be a fall from its exportations of wheat, oil, wine and raw materials of 13.1% and for Mexico, will cause a contraction of 5.3% of its exports on agricultural products. It also highlights the significant decrease in investment flows and the decline in remittance flows.

Historical statistics, 2009 can be seen as a major blow to Finland. Gross domestic product fell 7.5 percent. The last time there was a sharp drop in the space of a single year was 1918, when Finland was in the midst of a civil war.

In early 2010, it is difficult to find evidence of this economic calamity in the streets of Helsinki. The comparison with the Civil War period seems remote and exaggerated talk about depression. Finland's economy was recovered last fall, the signs of which include a rise in the stock 34 percent and a record in housing prices registered.

The Finnish Government is committed to participate actively in international cooperation to solve the economic situation in the euro zone respecting the sovereignty of each of its members, improving international governance to save European countries from default. Purchasing bonds from at risk nations to detrimental to the banks health financial position provides a disincentive for governments to get them budgets in order, reason why a cut in the deficit must be applied to GDP increases and in that way increase investor confidence as well by stimulating the economic growth.

Finland proposes a global oversight led by the IMF and World Bank to keep an eye on the flow of investment funds, and where by monitoring the management of national budgets. Investment is the exit, being concerned is not enough to fix nations economy, actions must be taking by international organizations.

We need European Fiscal Union, the conflict is at political level organization not economic, an Orchestra do not have a different director for each instrument, the work under the direction of the same director, who applies a hand movement to lead them to the most beautiful piece of music; the Euro area is a block (just like an orchestra) then it must operated under the same parameters and the same fiscal policy, in that way stability will be reached for each members, functioning as a great country a greater Europe. In addition, the multilateral decision-making systems, developing countries are not

represented indecision making and striking realistic commitments on payments between creditors and the debtors. The new world system should provide for a change in participation, representation and decision-making within these organizations.

Last but not least, Finland calls for amendments on the loan interest rate and debt installments. Sustainable development requires joint consideration of the factors that relate to the economy, society and the environment. Such a system would need strict boundaries, along with penalties and incentives to maintain discipline; Monetary Responsibility is the way to slow rising debt levels, and theres only one way to find it, Fiscal Policy Union, that mean same economic strategies and same taxation rates in euro zone, in that way the ECB and the FIM, will be focused in maintain inflation and borrowing under control.

Country: Committee: Topic: Delegate Name: Delegate School:

Finland ECOFIN - Economic and Financial committee Economic Integration Anyela Nieto Universidad Catlica Andrs Bello Guayana

The world has become less divided and more interconnected; today a serious economic crisis is the reality monetary stabilization worldwide, affecting communities, states and families around the globe. The financial system is paralyzed; therefore the priority is to restore stability, confidence and growth. A healthy financial market for prosperity and development is what global community needs, but also must continue with things as they are currently not an option. Any strategy effectively requires a higher level of thinking on issues of regulation and markets, accountability and ethics. Rules of the game must be based on a better balance between markets and governments, it is better coordination and to build institutions for current times. Globalization or integration represents both a threat and an opportunity, The aim of Finland`s foreign policy is to strengthen international stability, security, peace, justice and sustainable development as well as promote the rule of law, democracy and human rights; being a small country greatly dependent upon foreign trade; Finland has been one of the nations fully engaged in efforts to promote free market trade in Europe and the World, not

only in economical field but also education, science, technology, and environmental sustainable. Recent fiscal developments in several economies in the euro area (Portugal, Italy, Ireland, Greece and Spain) and the United States has aroused enormous interest in the share of foreign portfolios of the major banking systems invested in public sector of these countries, the world realized that a certain level of fiscal unity is crucial to the health of a monetary union, adding a unified monetary and fiscal policy, supranational economic institutions, and broader economic policy coordination to a common market would result in an economic unity and the way out of economic crisis and the open door to economic integration. In the present context, an optimal policy strategy to restore growth in the long term should include the opening of markets that may lead to strength in macroeconomic policies, labor and tax; Finnish Government proposed to introduce a flat tax in the international market, which is monitored by the WTO, to encourage investment in those countries with an unstable economy without the risk of investment loss, is more than simply economic help or borrow, it is and investment that will stimulate countries economy not only to investors but also the contra part. Establishing a flat tax in the global market at any moment would have big consequences, so it is Finland proposed to start with the European Union, then and when stability reigns in the Euro zone, this measure would expand worldwide, if Europe beginning with the countries in the Euro-group would be able to set an example and introduce a model for how a transaction tax actually could work, that would certainly give a

push to the international debate, creating economic integration level without incurring fiscal policies within each country, and maintaining sovereignty.