Advantage such as gear produces only waterHe designed superabsorbent microfibers for operations roomsTwo storms in a decade it's discouragingA priori is not particular influx in agenciesThe market also not welcomed the news with enthusiasmAnd the company accepts State aid wherever they comeIn addition the political aspect of the recordWe look for example acquisitions in Spain even if their use has decreased since thirty years5 billion in the second instalment of the convertible securitiesBanking credits, unbridled financial liberalization, hypertrophied banking system. This description reminds us of something. And it's yet another storm: one that struck in the early 1990 the Nordic countries. For the Finland, this crisis has been accompanied by an external shock extremely violent: the fall of the Soviet Union and, with the implosion of its neighbour, the end of a bilateral trade system which depended closely on this country. Penna Urrila, Economist of the Confederation of Finnish enterprises, estimated that this factor alone has been responsible for at least a third of the crisis.
Of course, the world after the 1991 Gulf war came into recession. But, for the Finland, the collapse was accentuated by a rigid exchange-rate system which sought to maintain the parity of the Finnish markka in an artificial way. For complete of all, a devaluation then ruined many Finnish companies to repay the loans in hard currency markets.
Today, a financial crisis and global economic threatening to develop into recession throughout the euro area, the Finland returns to the past. Never so, a country in the OECD area had experienced in the post World War II a such descent to the underworld. Between 1991 and 1993, its gross domestic product fell 14 and unemployment exploded 3 to 20. Numbers adjacent to those of the great depression of the 1930s and that some countries, in the turmoil, fear today. Its banking, as crisis points out Vesa Vihriälä, now Director of Economic Affairs at the Office of the Prime Minister of Finland, was, perhaps, one of the most severe ever known. It was marked by several bankruptcies as the SKOP and 40 savings banks, says the Economist. A shock.
Faced with this crisis, the Finnish Government is supported at the time on three main pillars.
The first is a profound reform of the banking sector with a deletion of about half of the workforce. In addition to the takeover by the Bank of Finland of the weakest financial institutions, Helsinki has chosen a dual approach: injection "as a precautionary measure" of capital into the banks to avoid the extension of the "credit crunch" and to restore confidence, and the creation of a Government guarantee fund for banks in difficulty. On the other hand, the generalization of a "bad bank" to support all of the non-performing assets of banks was dismissed. "Largely because it would have been a simple transfer of wealth from the Government to the banks", according to Vesa Vihriälä. All banks, after consolidation, could the State debt and were released after three or four years in the private sector.
Another pillar, a massive public intervention in the research and development, and an encouragement to the private sector, Nokia in mind, to follow this path. From 1991 to 1995, research and development funding was increased by 70, what class the Finland today at the top of the OECD as a percentage of GDP devoted to this type of expenditure (3.4). A policy which is accompanied by a reduction of tax pressure, that the Finland against winds and tides, to pursue this year.
And to complete all the Finland is entered in the European Union in 1995 by choosing the euro.
What are the lessons of the "Finnish case" Esko Aho, Prime Minister from 1991 to 1995, now Vice-President of Nokia, identifies seven, "plus one". The first, is that correct the worst case scenario. Then, adopt a strategy to get out. The third recommendation is to endeavour to improve the resources for education and research and development. The fourth: it must be understood that the crisis is not only a threat but as an opportunity to reform. The Fifth: any crisis encourages high mobility of employees. The sixth: you must be patient because the output of perhaps long crisis, here more than three years for the Finland. The seventh: public intervention in banks is necessary but it must be brief. Finally, "If a Government wants to reform really, he must make a cross on the next elections."
Of course, all Finnish revenue would not have the same efficiency throughout the crisis of today. Because it is a small country, 5.3 million, relatively consensual. But also because today ' today the crisis is global. The global demand in berne, could not develop a sustained pick-up in such proportions by the export, including those from Nokia. But there is a still a few lessons to meditate.
