Finnish economic downturn may affect Estonia (2)
Finland saw a massive strike on Friday, with public transportation halted and ports shut down, although Helsinki-Tallinn ferries were still operational, as workers protested against government cutbacks aimed at stopping the economic downturn. Fears are growing that the difficult situation in Finland will also affect Estonia.
Finland could enter a fourth year of recession after recording the lowest growth in the eurozone in the second quarter, and the unemployment is also expected to rise.
Last week, Finland's Prime Minister Juha Sipilä announced plans to cut back holidays, reduce housing allowances and other benefits.
If the situation worsens, it will inevitably have a negative impact on Estonia, as Finland is the country's second largest trade partner and hundreds of thousands of Finnish tourists visit Estonia every year.
Finland is also home for the largest Estonian expat community in the world, estimated at approximately 50,000. If the recession bites and unemployment rises, thousands of Estonians could be forced to return. Thousands of Estonian families have for years been dependent on the higher income earned in Finland.
Signe Liske, an Estonian shopkeeper in Helsinki, told Ärileht.ee that last year has been difficult for her business. “Many of my loyal Estonian customers, who were keen to buy Estonian products, have returned to their homeland,” she said.
Other Estonian businesses in Finland also report hard times. Some are thinking of closing.
While the Estonian exports to Finland has so far stayed fairly stable, there are signs of a downward trend – if in 2013, Estonian export to its northern neighbor increased by 9 percent, last year it decreased by 7 percent.