Finland Country Brief
Introduction
The Republic of Finland, a Nordic country situated in Northern Europe, is bordered by Sweden to the west, Russia to the east and Norway to the north. Finland is bounded by the Baltic Sea, with the Gulf of Finland to the south and the Gulf of Bothnia to the west. The Åland Islands, off the south-western coast, are an autonomous, demilitarized administrative province of Finland. Finland has a population of 5.3 million people (December 2008 figures), spread over 338,145 square kilometres, making it the most sparsely populated country in the European Union. According to the Finnish Constitution, Finland is a bilingual country with Finnish and Swedish as official languages. The capital of Finland is Helsinki. Finland celebrates its National Day (Independence Day) on 6 December.
Political Overview
The Republic of Finland is a parliamentary democracy with a republican constitution. The unicameral parliament (Eduskunta) has 200 members directly elected from 15 multi-member constituencies every four years. The President is entrusted with supreme executive power and is elected for six years by direct popular vote. Changes to the Finnish Constitution in March 2000 curbed the President's powers, requiring closer cooperation with the government on foreign policy matters and removing domestic powers relating to coalition building and the appointment of the Prime Minister.
The current Finnish Government came to power following the March 2007 election. The final results were close with the Centre Party, led by the incumbent Prime Minister Matti Vanhanen, winning 23.1 per cent of votes and 51 seats in parliament. The National Coalition came a close second with 22.3 per cent and 50 parliamentary seats. These two parties, and the much smaller Swedish People's Party and the Greens, then formed a centre-right government coalition, led by Prime Minister Vanhanen. The former government partner, the Social Democrats, lost 3.1 per cent compared to the 2003 election. The coalition holds 125 of 200 seats in the Parliament. The next parliamentary elections are due in March 2011.
The current President is Tarja Halonen. Halonen was re-elected for a second term in the Presidential election held in February 2006. Despite her popularity in opinion polls only weeks before the election, Halonen only won by a small margin. The opposition Conservative Party's candidate (Sauli Niinistö) came second and Prime Minister Vanhanen, the ruling Centre Party's candidate for President, came third. The next presidential elections are due in January 2012.
Since the collapse of the Soviet Union, Finland has sought out new political and security structures and in 1995, along with Sweden and Austria, joined the EU. Finland supports development of the EU's European Security and Defence Policy and is a non-NATO contributor to the ISAF in Afghanistan.
Economic Overview
Finland has experienced a downturn in its economy as the effects of the global financial and economic crisis impact its export markets and industrial output. In June 2009, the Finnish Ministry of Finance announced that Finland's GDP will decrease by 6 per cent in 2009 and stated that the average unemployment rate is expected to climb to 9 per cent.
Finland has few natural energy resources and in order to meet increasing energy demand the Finnish Parliament voted (107-92) in May 2002 in support of the construction of a fifth nuclear reactor in Finland. Work on the new reactor started in 2005 and it is expected to be operational by 2010. Finland's other energy options include increased use of natural gas and electricity imported from Russia. Renewable fuels account for around 25 per cent of Finland's energy mix.
Bilateral Relationship
There are about 21,000 people in Australia of Finnish descent, reflecting a wave of migration following the Second World War. There are over 100 Australians registered as living in Finland.
Australia and Finland signed a bilateral social security agreement on 10 September 2008, which came into force on 1 July 2009. The social security agreement provides improved social security protection to people who have lived or worked in both Australia and Finland. It also exempts Australian employers from the need to provide Finnish social security support for Australian employees sent temporarily to work in Finland, provided the employee remains covered by compulsory superannuation arrangements in Australia. Further information is available on the Australian Taxation Office website.
Australia also has a bilateral Working Holiday Maker Arrangement with Finland, which came into operation on 1 May 2002. Australia signed a bilateral Double Taxation Agreement with Finland in 2006, which came into force on 10 November 2007.
There have been numerous high level visits to Finland by Australians including: former MP, Ms Ann Corcoran (May 2007); Senator Eric Abetz, then Minister for Fisheries, Forestry and Conservation (January 2007); then Minister for Foreign Affairs, the Hon Alexander Downer (September 2006); then Minister for Communications, Information Technology and the Arts, Senator, the Hon Richard Alston (October 2002); then Minister for Immigration and Multicultural and Indigenous Affairs and Minister Assisting the Prime Minister for Reconciliation, the Hon Philip Ruddock MP, who signed the bilateral Working Holiday Maker Arrangement (April 2002); and an Australian Parliamentary delegation led by the then President of the Senate, the Hon Margaret Reid (April 2002).
President Tarja Halonen visited Australia in January 2007. Other high level visits included: the previous Minister for Finance, Mr Eero Heinäluoma (November 2006); a Parliamentary delegation led by former Parliament Speaker, Mr Paavo Lipponen (March 2005); and the Minister for Trade and Industry, Mr Mauri Pekkarinen who was accompanied by a business delegation (April 2004).
The Australian Embassy in Stockholm has responsibility for Finland (the Ambassador, based in Stockholm, has non-resident accreditation). Australia has an Honorary Consul in Helsinki. Finland has an Embassy in Canberra and a Consulate in Sydney.
Bilateral and trade relationship
Total two-way merchandise trade between Australia and Finland in the financial year 2008-09 was over A$1.5 billion (our 32nd largest merchandise trade partner). Australia's exports to Finland in 2008-09 totalled A$595 million including nickel ores and concentrates, coal, and alcoholic beverages. Finland's exports to Australia in 2008-09 totalled over A$ 977 million including paper and paperboard, civil engineering equipment, and specialised machinery and parts.
Export Opportunities
Export opportunities exist in all sectors. Austrade has targeted information and communications technology and wine exports as being the most promising sectors in Finland for Australian exporters.
Wine to Finland
Australian wines have gained a good reputation in the Finnish market, originally in the budget wine category, and in recent times in the mid-price range. Australian wines are known for providing good value for money and being easy to understand. In 2008, Australian wine sales fell for the first time but longer term prospects are still good if Australian prices are competitive and exporters are prepared to meet the demands of what is a relatively small, yet promising market. Finland is a member of the European Union, so the EU import regime applies.
Finnish Government Support
Finnish and foreign-owned companies are equally eligible for government and EU-sponsored incentives in Finland. The incentives are mostly intended to promote investments in economically less developed regions in northern and eastern Finland. Most of the support is provided for small and medium sized enterprises only and includes cash, grants, loans, tax benefits, equity participation, guarantees and employee training.
Trade Successes
An Australian minerals company with successful operations in Finland is Dragon Mining, whose mining and production facilities near Tampere produced over 29,000 ounces of gold in 2008. Dragon Mining has several other projects under development in Finland.
TradeWatch Contacts
If you would like more information on the trade and economic conditions in Finland, please email the Department of Foreign Affairs and Trade.
Last updated: 9 November 2009