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Finland announces €15bn support package to prop up economy

Reducing state debt is now a secondary consideration for Finland.

Carnival Mardi Gras -alus rakenteilla Turun telakalla.
The Meyer shipyard in Turku is expected to take a hit from coronavirus. Image: Petra Ristola / Yle
  • Yle News

Finland has announced a support package worth some 15 billion euros to try and support businesses and individuals as the economy enters a downturn.

The broad range of measures announced on Friday aim to assist people and businesses suffering from the financial downturn as the coronavirus pandemic strengthens its grip on the world.

The government says the measures amount to some 15 billion euros in support, with some allocated to loan guarantees and some to labour market support.

The package of measures is expected to radically increase state debt in Finland, but Prime Minister Sanna Marin said that was a secondary consideration.

"We are not thinking primarily of how much additional debt the state will have to take on," said Marin.

Finance Minister Katri Kulmuni added that once the crisis is over, Finland will have to focus on repairing the state finances.

Some 10 billion euros is to be allocated to the Finnish state’s financing arm Finnvera in order to prop up businesses as the crisis continues.

Minister for Employment and Economic Affairs Mika Lintilä said that businesses should in the first instance contact their bank to ask for support, with Finnvera guaranteeing the loan.

In addition, ministers in Helsinki announced they would shorten the notice period for temporary lay-offs from fourteen to five days, saving firms salary costs as they cut back.

Workers laid off can claim income-linked benefits, provided they are a member of an unemployment fund through their trade union or independently.

In addition, the government will eliminate the waiting period before people can claim unemployment benefits, and allow freelancers and sole traders to claim unemployment benefits without shutting down their businesses.

Forecasts for economic growth in Finland have been slashed this week, with the Bank of Finland predicting that GDP will fall by between 1.5 and 4 percent in 2020.

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Sources: Yle