"The Finnish economy experienced a decline last year that is deeper than any that has taken place in any single 12-month period since the Civil War which followed the country’s independence.
According to figures put out by Statistics Finland, total production in Finland declined by 7.8 per cent last year.
Only in 1917-1918 has total output declined by more.
Not even in the economic crisis of the 1990s, nor in the Second World War, did the Finnish economy fall as steeply in a single year as it did in 2009... read the rest@ hs"
... Not sure what will be the price to pay for that in the years to come... Any idea?
"... Meanwhile, Finland’s Minister of Labour Anni Sinnemäki (Green) said on Monday that she hopes that unemployment in Finland will peak by the middle of this year.
“If this does not happen, and if it does not peak until next year, we will be in serious trouble”, said Sinnemäki at a meeting of EU competition ministers in Brussels."
...Strange, who will be in serious trouble?... Any idea?
13 comments:
Governement of course. Tax revenues are already falling and if unemployment continues to grow unemployment benefits are at risk of being lowered, aswell as all other expenses that government has.
So all subsidies, governement workers jobs are at stake. Not to mention a need for tax hikes should thins continue as they are.
People will be in trouble. Or do you think the great depression was all fun and games??
Presumably i am not now getting my rubbish cleared and my wife has to make alternative arrangements to get to work because ordinary folk are finding it too expensive to live in Finland? And importantly these people are employed.
And to anonymous it is rediculous to talk about only government workers jobs at stake when something approaching 100,000 people have probably lost their jobs in the private sector in Finland in the last few years.
I see some chance that this huge hole will be covered by creating another even bigger bubble. That will postpone the crisis for another 7 to 12 year or so. You have seen the central bankers are creating the "wealth" by issuing debt and then "buying" the debt themselves. Maybe, another chance would be to find materially fat sheep or pigs bigger enough for those very, very heavily indebted, hungry, but very, very muscularly powerful lions to eat. In this case, what kind of animal is Finland?
The above are the reality of the world economy and politics, if not all. The cheating theory from the economics has never worked and helped. I am sorry to say so.
"I see some chance that this huge hole will be covered by creating another even bigger bubble. That will postpone the crisis for another 7 to 12 year or so."
This strategy was put in place in 2003 and was irresponsible and created the mess the financial world is... so today we have a financial crisis of a very high scale because they have delayed "politically" painfull decision... I think we have reached the limit (see greece and more will follow)...
I see the Greece, Toyota... cases as the story of "lions eat fat sheep and pigs."
Look, it was a trap set by Goldman or the Fed many years ago. They knew the poor but greedy Greece cannot pay the debt back. So, Goldman/Fed also bought CDS then. Now, it is the time for the harvest by "bet" on the then already known fact "Greece cannot pay it back." Will € be the next big and fat sheep? You never how many traps have been set for €...
As i read it this is one of those multigenerational changes in society.
Money is just the means of exchange. Debt can be devalued by producing more money. Obviously currently attempts are underway to devalue money and debt.
But our economies were not in balance. 40 years ago the cheapness of labour and economic of abilities of the rest of the world began to impact upon the lifestyles of people in the west.
The workers demanded the same lifestyle of better and wanted to live more like the bosses
The bosses just took the work to the cheaper labour.
But imbalances have built up where the savers in the world are principally in the none western world.
China for example has a few trillion in reserves. And China is spending like no tomorrow at the moment.
We cant know what the world will look like but fundamentally the same forces are going to be at work. You either fight the force or use it to your advantage.
When people like me align themselves with the force and buy a house with cheap debt and begin spending money on heating equipment we are creating the force that drives all of our lives.
Others might want to dilute the force by not spending but modern banking does not care if you dont want to spend while you save because it just devalues your 'modern money'.
Let the force be with you
Actually, I see neither of them (with or against) can effectively protect the wealth of a humble individual. If you consume over debt, right, you may end up as a piece of coal that burns itself to heat the steam for others, like many now burnt ash from the US housing bubble. If you save it in the bank, your wealth will be partly stolen by the money dilution. Now, the important things seems to be to understand what way can make you suffer less and, when.
Anonymous i agree. A person has to be sensible.
So people save in gold or property or some asset when times are good and they pay down debt when the economy is in trouble so that they have more asset they control and when recovery is possible they can, if they want, take on more debt again to spend those extra savings they stored up.
Most better paid finns are today saving more and getting more control of their assets.
Real estate prices are however set on the margins by those who are buying and selling and there seems an absence of sellers and sufficient buyers for the time being.
Meanwhile this crisis has been running for around 3 years which is a fair amount of saving done already.
"The Finnish Social Insurance Institution (Kela) said Wednesday that the number of housing support claimants had jumped by more than 15 per cent to about 450,000 last year, a figure not seen since 1994 when Kela began processing housing support applications.
Kela added that housing support claimant numbers had risen because of rising unemployment."
This is just highlighting the issues with regard to housing affordability ....
The trend that I see is that the rural areas in the north of finland are emptying out bacause of the younger generations moving to where the jobs are, ie. the cities.
Heslinki though has already reached it's upper limit but Espoo & Vantaa keep growing relatively fast:
http://www.hs.fi/english/article/Population+increase+largest+in+Espoo+and+decline+fastest+in+Helsinki/1101978123366
http://www.vantaa.fi/en/i_uutinen.asp?path=110;4664;44483
Not only Finns are moving more and more south, also Foreigners living in Finland:
"the Helsinki region as a whole tends to attract people with foreign backgrounds from other parts of Finland." (quote from vantaa link)
For houseprices this is a demographic factor that should not be ignored; especially for Helsinki Supply is limited and demand remains high; Chances of finding employment are highest, additional yearly influx of students too keeps demand for housing high.
But helsinki must just tend to be a port of arrival and administerative centre for all of Finland
If nothing happens in Finland not much will happen in helsinki that can allow helsinki to survive.
Is finland going to be some consumers and some farms and a population of 4 million to support the current house prices?? how the hell is that going to work please?
"If nothing happens in Finland not much will happen in helsinki that can allow helsinki to survive."
This argument is used aways at the top of bubble (see the US, UK or Finland in 1990).
The reality is that asset price readjust because they are simply cause by a boom trigerred by multiple reasons (interest rates, world growth, population)...these is only a temporary phenomenon followe by a bust...
Anonymous you seem to be agreeing with me. I am saying that if the whole country is in difficulty then helsinki cannot be special and escape that.
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