Discover Finland : Current issues

The industrialization process in Finland since the end of the Second World War differs from that in other Nordic countries, where change is gradual. The exorbitant repayment of war debts to the USSR necessitated an increase in productive capacity. In the 1960s and 1970s, industry expanded considerably. The liberalization of the money market in the early 1980s, combined with high interest rates, led to an overvaluation of the mark. As a result, Finland became one of the most expensive countries in the world. In the early 1990s, Finland entered an economic crisis. In November 1991, the Finnish mark was devalued following the collapse of the USSR. Too economically dependent on its large neighbor, which at the time accounted for 25% of its trade, Finland took the brunt of the crisis. Today, after an unemployment peak of 9.4% in 2015, it has managed to reverse the curve.

State structure

Among the Nordic countries, only Iceland and Finland have opted for a republic. Denmark, Norway and Sweden remain constitutional monarchies. The President of the Republic, Head of State, is elected for a six-year term by direct universal suffrage, and may not serve more than two consecutive terms. The government, for its part, must enjoy the confidence of parliament(Eduskunta), made up of 200 deputies elected for four years. Since 2012, and following his re-election in 2018, the President has been Sauli Niinistö. The next election will take place in 2024.

Political parties

National Coalition Party (Kok): the conservative party of President Sauli Niinistö, elected in February 2012 with 62.6% of the vote and re-elected in 2018 with 62.7%. Although Niinistö stood in the last elections as an independent candidate, it was a major comeback for the right, which had been absent from power since 1956. This former Finance Minister (1996-2003) is one of the main proponents of Finland's transition to the euro, and his election, at a time when euro-skepticism is on the rise in Finland, is a strong sign.

SDP: social-democratic party of the very popular Tarja Halonen, elected president in 2000 and 2006, the first woman in the world to serve two terms. Matti Vanhanen was her Prime Minister for several years, but was forced to resign due to suspicions of corruption and influence peddling at the start of his second term. For 2018, Tuula Haatainen is the candidate. The party crashed out of the 2018 presidential election with just 3.25% of the vote in the first round.

True Finns (PS): an ultra-conservative, nationalist, anti-European populist party that achieved a real breakthrough in the 2011 legislative elections, with 19%. A score that has to be put into perspective since the 6.93% in the 2018 presidential election. Timo Soinien is the undisputed leader. The True Finns refused to participate in Jyrki Katainen's conservative government, after the latter approved financial aid for Greece. In 2018, Laura Huhtasaari is the candidate.

Center Party (Kesk): Paavo Väyrynen scored 17.5% in the 2012 presidential election. He fell 1.3% short of the second round. In 2018, the party was represented by Matti Vanhanen, who scored 4.10%.

Green Party (Vihr): its leader Pekka Haavisto created a surprise by reaching the second round of the 2012 presidential election. In 2018, Pekka and the Green Party achieved 12.40%.

An enclave with privileged status

The Åland archipelago, a natural bridge across the Baltic between Stockholm and Turku, has a special status. Its autonomy is guaranteed by an international agreement that the Finnish Parliament cannot change on its own. A brief historical reminder: during the civil war in Finland in 1918, a separatist party in favour of joining Sweden was formed in the archipelago. After debate, the issue was finally submitted to the League of Nations (League), which gave its verdict in 1921. Finland's sovereignty was maintained, but the preservation of the Swedish language and the culture of the islanders had to be guaranteed. The Ålanders were therefore given autonomy and a local government and parliament.

Territorial Litigation

A large part of Karelia, occupied by the Russians in 1940, had to be ceded to the USSR in 1947, leading to the exodus of 400,000 people. Although the Finnish government has always shown great restraint regarding this dispute, associations have long been campaigning for the restitution of this annexed territory. Others, more realistic, are opposed because of the dilapidated infrastructure. However, thanks to the European Union, cross-border cooperation has been established. The Euregio Karelia project, inaugurated in 2000, is tasked with developing cooperation between Finnish and Russian Karelia on economic, environmental, tourism and cultural issues. A diplomatic solution... which suits Finland very well, as it knows how to deal with its restless neighbors. Strategically, Finland has also lost its access to the Arctic Sea. Where the Finnish, Norwegian and Russian borders meet, Finland is just a few kilometers short of the shores of the Far North. This is why Finland claims the port of Petsamo on the Arctic Sea. It should also be pointed out that Finnish airspace is often violated by Russian air forces... Very quick incursions for pilots flying from St. Petersburg to Kaliningrad, but of course, this has a way of irritating Finnish public opinion. Against this backdrop of growing tensions with its powerful and still distrustful neighbor, and despite patient diplomatic goldsmithing, Finland is moving ever closer to the West, in particular through multiple collaborations with NATO, which finally led to its accession in 2023, a move greatly accelerated by Russian aggression in Ukraine.

Main economic resources

Agriculture: Finland is Europe's northernmost agricultural country. Farms are essentially small family-run operations. Farming in subarctic conditions involves many constraints. Production is primarily based on grassland. The traditional dairy industry is based on a cooperative system. Crops and cattle breeding for milk and butter production are mainly developed in the south, where the climate is milder than in the rest of the country. Given the small amount of arable land available for cultivation (only 7%) due to its harsh climate, as well as the massive presence of lakes and forests, Finland began extensive agricultural research at a very early stage. The country is in the process of establishing an exemplary model of sustainable development that respects the environment.

Forestry: with forests covering 73% of the country's surface area, the forestry industry has long been the backbone of the Finnish economy. In the first half of the 20thcentury , it accounted for almost 80% of national exports. At the time, a significant proportion of the population worked in the sector, felling trees in winter and floating timber in spring (a tradition now revived as part of local and tourist competitions). Initially world-renowned for the quality of its timber and timber products, Finland also made its mark in the machine tool sector. The country is now one of the world's leading paper producers, with companies such as UPM-Kymmene. Not to mention the world's largest paper machine manufacturer (Metsä) and one of the world's leading forestry machine manufacturers (Ponsse).

The development focus of these global giants is now on the bioeconomy, with the development of new uses for forest products. Today, however, forestry-related exports account for just 20% of the country's total exports and 4% of GDP (2018), making it the country's second-largest export. At certain times of the year, you can admire the floating of timber on rivers and lakes. Logs are cut and tied together to form a sort of steerable raft that floats downstream. This technique, which dates back to the Middle Ages, is still used today in Finland. A superb spectacle!

Finnish industries

Finland has resolutely turned to high technology, particularly communications systems. Nokia, for example, went from producing rubber boots to manufacturing the famous cell phones in the early 1990s with almost insolent success. But the Finnish telecoms company, which employed up to 122,000 people worldwide, suffered the full brunt of the crisis, missing the turn to smartphones. 95% of Finnish households are equipped with the Internet. In 2010, Finland became the first country in the world to make high-speed Internet access a right, ensuring that all Finns have such a connection. More than 600 scientific research companies are based in the high-tech villages of Espoo, Turku, Tampere, Jyväskylä, Lappeenranta, Kuopio and Oulu.

The mechanical engineering industry remains one of the country's biggest employers. It includes some of the flagships that have made the country's reputation abroad. Koné specializes in elevators, escalators and lifting equipment. It is one of the world's top three groups in this field: its share price rose 47% in 2012! The company has become the country's leading group by market capitalization (15 billion euros). The now-divided Metra Group produces diesel engines, bathroom equipment (Sanitec), locks and electronic access systems (Abloy Security). Vingcard Systems develops punched-card hotel locks. Teräsbetoni focuses on designing buildings that meet the most stringent environmental standards. Ponssé, Valmet and Timberjack (acquired by an American in 2008) also manufacture harvesters. These huge futuristic machines, invented by the Finns, cut and fell an entire tree in a matter of seconds. At the end of the crane is an incredibly sophisticated head, a sort of powerful mechanical hand, capable of cutting and felling the tree in a single movement. France is currently Ponssé's No. 1 export market. Since the storm of 1999, but also because France is heavily forested and 80% of logging is still done by hand, France is an excellent outlet for this technology, the flagship of Finnish industry.

The metallurgical industry, which has had to adapt to the shipbuilding crisis, nevertheless exports 70% of its production to nearly sixty countries. Rautaruukki's steel, for example, adapts to the extreme conditions of the Arctic regions.

Chemicals, the country's third-largest industrial sector, produces lubricating oils, fertilizers, plastic and synthetic products, paints, dyes and pharmaceuticals. Kemira is Europe's second-largest fertilizer manufacturer, after Norway's Norsk Hydro. Plastics, a material derived from oil refining, is also a Finnish specialty. The very strict environmental constraints governing industrial activity lead to solutions that are often innovative. Products have an above-average lifespan. Recycled materials also play a major role in product composition. Neste, the country's leading oil company, produces the gasoline and diesel best suited to the cold (the lowest temperature of the 20thcentury was recorded in January 1985 in a small village in the north of France: -54.4°C).

Design, on an industrial scale, is also one of Finland's specialties. Porcelain, silverware and, above all, glassware and jewelry (whose reputation is well established). Fiskars, famous for its orange scissors, is Finland's oldest company still in business.

Particularly in its early days,biotechnology held great promise for the Finnish economy, particularly in terms of taking over from ICT (information and communication technology) and keeping the country at the forefront of cutting-edge technological innovation. It is also one of the first countries to have successfully applied biotechnologies, notably in wastewater treatment and energy recovery. Strong growth rates and successes up to 2003 encouraged the development of this sector and the creation of new companies. After a slump since 2007, the sector seems to be growing again.

The place of tourism

Finland attracted around 7 million tourists in 2017, before experiencing a severe plunge due to Covid-19: this area represented 2.7% of GDP before 2020, but has fallen to 1.4% before rising again to 1.6% in 2021. French tourists account for around 10% of the total. Four main "attractions" attract visitors:

Skiing. Two-thirds of tourists prefer to come in winter, to take advantage of the ski season between December and May. Skiing in Lapland in December and January is very popular: you're immersed in bluish light (the sun doesn't rise) and all the downhill and cross-country trails are lit up. From March-April onwards, the snow cover and the length of daylight (the sun sets between 9 and 10 p.m.) make skiing fantastic.

Thalassotherapy. Finland also boasts a wide range of wellness facilities, with its sauna culture and traditional fitness methods, particularly those based on peat.

Design. World Design Capital in 2012, Helsinki welcomed over a million visitors to see the 580 projects on display.

Winter tourism. Lapland is becoming an increasingly popular destination during the festive season for travelers in search of Santa Claus and enchantment! Finnish airline Finnair has opened several regular winter flights from Paris to Lapland.

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