In March of this year, then-Prime Minister Alexander Stubb warned that if Finland did not change its ways then it would face a ‘lost decade’ due to the deep economic crisis that has strangled the country.

“I’m afraid that if we can’t launch significant moves, we could have another lost decade ahead of us, just like the one we are experiencing now.” – Alexander Stubb

And now, with a new government, Finland is still struggling to forge a path out of the deepest economic downturn the country has seen in a generation.
External factors like the weakness of the Eurozone and the imposition of EU sanctions on Russia, whom is Finland’s largest trading partner, have greatly impeded Finland’s economic recovery.

However, it is the internal triggers of Finland’s economy that have allowed such damaging external influences to drag the country into its current situation.

The situation in Finland today is quite a bleak one; unemployment has crept over 10%, and the employment rate for those aged 15-65 has fallen sharply to 66.7% as of January 2015.

Wage costs in Finland have spiraled out of control in recent years as labour costs have also increased by over 20% since 2008, whilst overall productivity fell sharply by 3.9% per annum in the period 2007-2012.

Political instability in the country has added to its economic woes, with the fragile coalition government led by Prime Minister Alexander Stubb being dubbed to least productive administration in living memory.

Now, after the general election in April the victorious Centre Party led by Juha Sipila in coalition with, amongst others, the eurosceptic True Finns Party is set for a turbulent four years in power.

All things considered, it’s difficult to see how Finland could correct this troubling course and return to the boom time of the 2000’s.

With virtually no control over its own monetary policy due to the nature of the European single-currency, Finland is unable to devalue its currency or affect real change with the ridiculously high wages present in the country.

Foreign companies wishing to invest in Finland are often turned off by high business tax rates and a relatively small national market, and thus new development will continue to slow.

Now being dubbed the next ‘sick man of Europe’ by the Financial Times, Finland will continue to struggle economically, and with a lack of political will coming from the highest echelons of government, it seems the former Nordic powerhouse will have no choice but to dwell in its misery for the years to come.