Finland: Economy continues to fall

Crisis demands action

This article is also avaiable in Finnish here

Economy continues to fall

Finland’s economy continues its deep fall. A certain slowdown in the crisis has taken place in the world due to gigantic stimulus packages. However, in Finland, the fall continued during the second quarter of this year.

Finland’s economy is very dependent on exports, and exports fell more than 30% in the second quarter – largely due to the crisis in the forestry and paper industry. The government is now injecting money into the banks. At the same time, workers, youth and pensioners are forced to pay for the crisis.

Just as in the rest of the world, the right-wing government, led by the Centre Party, is using the crisis to carry out new attacks on workers.

The Finnish economy continued on its downward spiral during the second quarter. GDP fell by 9.4%, compared to the same period last year. Compared to the first quarter this year, GDP fell by 2.6%, according to Finnish statistics.

Finland has been hit hard and is now lagging badly behind, believes Timo Tyrväinen, chief economist at Aktia. “In other countries you can already see an upturn during the second quarter, but here we went down”, he said to Hufvudstadsbladet (13 September).

The downturn started in the financial sector but gathered momentum with the sharp fall in exports. Exports fell by 36% compared to one year ago! Large numbers of industrial jobs are disappearing. According to the latest figures, unemployment was 8.8% in August.


The forestry and paper industries are the mainstay of Finnish capitalism and account for one fifth of its exports. During the second quarter of 2009, production in the timber industry fell by 35%. Only 58.9% of capacity was in use in the industry.

The paper giants, Stora Enso and UPM, have closed several plants and slashed large numbers of jobs even despite making profits. Between 2005 and 2008, almost one in three jobs disappeared in both companies. The crisis is hitting industrial workers very hard with many being sacked. Whole communities that are dependent on factories are suffering.

Instead, these companies have been investing in low-wage countries. Stora Enso, for example, has set up eucalyptus plantations in Brazil, where poor farmers are driven off the land, the soil is ruined and water sources are poisoned.

Stora Enso announced new cuts in August this year. Papperiliitto trade union, spoke of strike action initially. However, they have now decided not to go on strike, but merely to demand the resignation of a government minister.

The unions need to struggle for jobs. Methods such as were used in Kemijärvi, in January 2008, when 300 demonstrators occupied the factory, are what is necessary. The CWI demands the nationalisation of companies threatening sackings, under democratic workers’ control and management. State-owned timber mills need to be under workers’ control, not run with private profit-seeking companies as their role model.

Crisis in economy

The EU Commission recently approved Finland’s programme for capital injections into the country’s financial institutions. The Finnish state is recapitalising the banks by buying secondary lending-instruments from them. These loans are then supposed to be paid back within three years. The budget for the programme €4 billion.

At the same time, working people are faced with unemployment and poverty. For example, more and more people are standing in queues for free food from the local authorities.

According to the banks, the number of households having problems paying their mortgages has doubled. With rising unemployment, the number of failed mortgages will also increase.

Crisis in elderly care

Investigations by county administrative boards show a frightening situation regarding the care if the elderly in Finland. All five reports conclude that the reason for the terrible situation for old people is a lack of staff. For example, they have shown that elderly people are often tied to beds or chairs during the night, sometimes even during the day, for their own safety, since there is a lack of staff. Those who try to run away are locked up in their rooms and sometimes even sedated!

Old people in good health are forced to wear diapers, since there are not enough staff to help them to the bathroom. They are seldom allowed to go out. Especially in bigger cities, old people are only allowed to go out if they have a relative or a volunteer who can escort them.

The situation is unsustainable for both users and staff. It is now necessary to conduct a struggle for a restoration of elderly care and the public sector as a whole. CWI Finland demands a end to the cuts and a rescue package for the public sector.

Climate change, racism and the left

Concerning the environment, Finland today has a goal of reducing carbon emissions by 5-10% by 2020, a goal which is far too low. Finland has been expanding its nuclear power industry, most recently with the building of the ‘Olkiluoto 3’ reactor. Since this has begun, investment in renewable energy has slowed down. At the beginning of September, hundreds of people gathered in Helsinki for a climate change protest. The demonstration demanded that Finland’s environmental laws be revised.

The organisers say that around 1,500 people participated in the demonstration, which was part of a broader climate campaign called “Polttava kysymys” (burning questions). The campaign is supported by 23 different organisations.

In the wake of the crisis, racism is increasing in Finland. For example, increased racism in schools has been reported, but also an increased number of physical attacks on immigrants. The Swedish neo-nazi organisation, “Svenska motståndsrörelsen”, has recently been putting up posters in a number of cities in Finland.

The left in Finland is very weak, which opens the way for racist forces. Workers, youth and pensioners lack a political party of their own. Union activists, together with other campaigns and grassroots movements, need to come together to be able to take the first steps towards building a socialist workers’ party, a workers’ party that actively fights against right-wing policies and refuses to let ordinary people pay for the capitalist crisis.

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October 2009