Finnish industry suggests cancelling summer holidays to restructure economy

The Bank of Finland has estimated that coronavirus will decrease the country’s GDP this year drastically. If restrictions and closures last for more than three months the predicted fall would be around 5%, while in the worst-case scenario it would be above 10%.

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Recent signals have given room to cautious optimism. Measures against the virus seem to have an effect. If the positive trend strengthens, some analysts see a possibility to kick start the economy in the summer. That might cancel the holiday season between June and August. Traditionally, Finland has been more or less “closed” during the summer months.

According to Risto E.J. Penttilä, the CEO of Nordic West Office, the holiday season and the dismantling of restrictions are not compatible.

“That would be the moment to start reconstructing the economy, not the time to go on holiday. If the growth gets underway, in principle we should be working,” said Penttilä in a TV interview on MTV3. Nordic West Office is a global affairs consultancy and think tank established by Mr Penttilä and the former CEO of Nokia, Jorma Ollila.

Similar views were expressed by the Confederation of Finnish Industries (EK). Its Chief economist, Sami Pakarinen said in the same TV programme that summer vacations need to be adjusted to the situation.

The Emergency Powers Act of 17 March offers a possibility to adjust the laws concerning vacations especially in sectors considered vital for running the society. Whether the Finnish PM Sanna Marin’s government will take the political risk to cancel vacations remains to be seen.

Tourism for Europe’s south has been a vital industry representing a high percentage of the annual GDP. However, the COVID-19 pandemic has completely changed the landscape. In Greece, where tourism represents around 20% of the GDP, is expecting a huge backlash this summer but tourist stakeholders push forward a “Plan B”.

In the light of potential decreased number of tourists from northern Europe, the Mediterranean country is reportedly focusing on tourists from regions which hold good bilateral ties with Greece: the Balkans, Cyprus and the Middle East such as Lebanon and Israel.

To boost the competitiveness of tourist sector, the tourism association has proposed a temporary reduction in VAT on accommodation, catering and transportation.

(Pekka Vänttinen | – Edited by Sarantis Michalopoulos)

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