Finland: in the middle of a “lost decade”

This article was originally published on Fair Observer.

Despite being affected by the global economic crisis, Finland has a flourishing economy with a nominal gross domestic product (GDP) of $267 billion.

Finland is a country in which you rarely experience such phenomena as inflation or overpricing. Transparency and government accountability are the major characteristics of the nation’s economy. The purchasing power parity in Finland, according to the International Monetary Fund’s 2013 figures, is higher than such economic powerhouses as Japan, France, Britain and Italy. Jutta Urpilainen, Finland’s former finance minister, believes the country is in the midst of a severe structural change, and that many sectors of its economy have suffered a setback in recent years.

In order to discuss the current state of Finland’s economy, the impact of the European Union’s (EU) sanctions against Russia and other issues surrounding the Finnish financial and industrial sectors, Fair Observer spoke to Urpilainen.

Urpilainen was Finland’s finance minister between 2011-14. In this capacity, she served as deputy prime minister under Jyrki Katainen. From 2008-14, she was the chairperson of the Social Democratic Party of Finland, and was the first female head of the party when she was elected to the post.

Kourosh Ziabari: It has been reported that Finland’s economy has suffered due to the EU sanctions against Russia. Prime Minister Alexander Stubb has said that Finland’s economy is in the middle of a “lost decade” as a result of the EU’s deteriorating trade ties with Moscow, and what he has described as a decline in the Finish industry. How do you analyze the impact of EU sanctions against Russia on Finland’s economy, given that Trade Minister Lenita Toivakka has also warned against the possibility of counter-sanctions by the Kremlin?

Jutta Urpilainen: Indeed, current growth predictions seem to confirm that we are in the middle of a lost decade. The predictions show that the 2008 GDP levels will be reached in 2018 at the earliest. The problem of stagnation concerns Finland, Russia and Europe as a whole. Conflicts and trade sanctions do not help the situation.

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This article was originally published on Fair Observer.