WEF studies reasons behind Finland's faltering economy
The weather has not been the only thing worse than expected this summer, as 2015 looks to be the fourth consecutive year that the Finnish economy has faltered. Elsewhere in the Euro area, except for Greece, economic activity is already picking up. The World Economic Forum reports on the details.
One of many issues discussed discussed in the article is labour cost. The last few years the agreed universal pay rises have been moderate and inflation is standing low. High labour cost is one issue and the political lead have even flashed pay cuts by the end of the decade:
In the short term, it looks like it’s going to be a difficult period for Finnish workers. On 22 July, Finnish Prime Minister Juha Sipila announced plans to cut the country’s wage costs by 5% by 2019. In other words, there are going to be significant pay cuts.
While Finland still boasts the lowest income inequality in the European Union, the gap between incomes is growing. A part of the population is doing better than ever, while a part is dropping outside of the society altogether. Some areas, like Salo, are especially hard hit due to a large employer closing shop. This also heats up discussions of a looming property bubble in the stagnating Nordic country.
Read more from the World Economic Forum site: What’s happening to Finland’s economy?
The Washington Post also has an excellent article that dicussess why Finland is the poster child for why the euro doesn’t work