Finland warns Russia sanctions could spell ‘economic crisis’

Alexander Stubb speaks at a conference by Kokoomus, the National Coalition Party of Finland, June 2, 2014 [Flickr/Ville Oksanen]
Alexander Stubb speaks at a conference by Kokoomus, the National Coalition Party of Finland, June 2, 2014 [Flickr/Ville Oksanen]

Finland could face an economic crisis because of European Union sanctions against Russia and Helsinki will seek financial compensation from the EU if it is disproportionately hit by the measures, its prime minister said on Wednesday (6 August).

Last week, the EU imposed tough sanctions targeting Russia's banking, oil and defence sectors over Moscow's stance in the Ukraine crisis.

The West accuses Moscow of actively backing pro-Russian rebels in eastern Ukraine and blames them for downing a Malaysian airliner last month. Russia denies the charges.

Russia is Finland's third largest export market, accounting for about 10% of total Finnish sales abroad. Russian tourists also spend roughly €2 billion annually in Finland, a neutral country which shares a long border with Russia.

"This has the potential - and I stress potential - to become economic crisis 2.0," Prime Minister Alexander Stubb told reporters, adding that the indirect impact of the sanctions could be significant for Finland.

>> Read: Estonia, Baltic states stand to suffer most from Russia sanctions

Finland is struggling to exit from two years of economic slowdown that has battered its electronics and paper industries. Some economists expect further contraction in 2014, while the finance ministry has forecast meagre growth of 0.2%.

Stubb, who organised his news conference at a beach cafe in sunny Espoo near Helsinki on the last day of his summer vacation and wore shorts and sandals, said Russia would suffer a bigger direct hit from the sanctions than the EU countries.

Stubb, who took over as prime minister in June and has called in the past for Finland to abandon its neutrality and join the NATO alliance, said he expected Russia also to impose retaliatory sanctions, but said the EU measures were necessary.

"We have to be crystal clear about why we are in this situation. We are here because one country has invaded parts of another country and flagrantly violated international law ... We have to think about international law," he said.

Russia annexed Ukraine's Crimea region in March and, despite its denials, is widely believed to be providing financial, military and logistical support to the separatists battling Kyiv's forces in mainly Russian-speaking eastern Ukraine.

"Sanctions were necessary at the current juncture," Stubb said, adding that no EU member state should suffer economically more than others because of the sanctions against Russia.

"It is without doubt clear that if sanctions hit a certain country disproportionately, that has to be compensated ... It is also clear that if sanctions hit Finland disproportionately, we will seek aid from our EU partners," he said.



an european's picture

That is happening when dealing with Russians !
Russia is Finland's third largest export market, accounting for about 10% of total Finnish sales abroad!
Why not try to export elsewhere in the world Australia ...Canada .. United States ..or elsewhere if Russians ban the import as they did recently on Poland with vegetables !!
Mr Stubb - Remember that Russia already renamed the McDonald to Russy-Burger after the fast 1Day annexation of Crimea !
And yes Russia will ban some of Denmarks exports too because he don't really car besides what he really want which is grab deeper into Ukraine snakely !

Jay's picture

Obama claimed that Ukraine had a right to determine its own destiny and therefore continued interference from Russia could not be tolerated. The current regime occupying Kiev was installed by NATO to serve EU interests with US Senator John McCain whose National Endowment for Democracy (NED) subsidiary, the International Republican Institute (IRI) funded the various fronts that led and supported the 2013-2014 Euromaidan mobs, literally taking to the stage during the protests to offer support for the Neo-Nazi Svoboda Party in Kiev.

What the US means to say is Russia’s interference with NATO’s plans to subvert, overthrow, and replace political orders along Russia’s borders with belligerent NATO proxies will not be tolerated.

So tell me how you get the fuzzies and cozy feelings with tanks parked on your block

an european's picture

"The current regime occupying Kiev was installed by NATO"
Who annexed Crimea to Russia PUTIN.
But I'm not talking about Nato Svoboda , Kerry or McCain or the U.S. !
What i know is that most of citizens there did not like Janukovitch !
Their economy was and is in mess and People there want trade merely with the E.U. (or be in) for a different style of live !
Ukrainians people can't even pay all the gas and Russia is raising the price of Gas with extortion on them !!
So what is the option ? Give Russia the state Donesk and redraw a new border line? Why not letting annexing Ukraine completely to Russia and continue to deal with Russia the gas, vegetables, Mistrals , etc ?
Maybe with the help of insurgents in 2 Days Russia has annexed Ukraine ignoring defenseless people ? Solution done ?
DDR was past an an DDU will born ?

Europe should be energy independent first !
Europe can learn and have indeed lot of options doing it so !

an european's picture

nothing against it but why!

Did i say something wrong?

Fact is that MC Donald has been renamed to "Russian" Burger in Crimea !
Russia block the imports of fruits of Poland !
Insurgents shot down the MH17 (with evidence that a truck with this kind of missile flew back to the "Next" border!
Now all the Europeans flights have to pass around Russia (or) ..whatever this means ...!