Government ministers are meeting for two days of budget talks largely focused on how much to spend to mitigate the impact of the coronavirus pandemic.
Arriving at the House of the Estate in Helsinki on Tuesday, Prime Minister Sanna Marin (SDP) said that the most important task for the government “is to overcome the crisis with the least possible damage.”
However, Marin said that the middle of the coronavirus crisis was not the time to completely scrap the government’s policy programme.
“After the summer, in the budget debate, we are in a better position to see what kind of operating environment we are in” says Marin.
Finance Minister Katri Kulmuni (Centre) said on Tuesday that the state will incur billions of euros of debts to tackle the fallout from coronavirus, while Helsingin Sanomat reports that there are likely to be two supplementary budgets proposed by the government in April and May, with up to €5 billion extra spending.
Economists say that compared clarity about restrictions on businesses and movements around the country make it easier to move on to the next steps of helping businesses.
“The situation is now so acute that it kind of hits everyone. I’m not surprised that there are lots of things happening in small firms, medium firms and big companies” explains Sami Pakarinen, Chief Economic Policy Advisor at the Confederation of Finnish Industries EK.
“It’s firstly a health problem, secondly we see the downturn in manufacturing, and now this third wave we see coronavirus hitting very quickly to the service sector and this is a totally new situation” he explains.
Pakarinen notes the economic assistance through grants and loan guarantees which the government has proposed so far, but says the key issue is how quickly money finds its way to the businesses that really need the help.
According to the Ministry of Employment there are already 360,000 people in temporary lay-off talks, which include only firms that employ at least 20 persons, like household-name companies like Finnair, Marimekko, Fiskars, Kesko and many others.
Adding in smaller and medium-sized companies the figure is more than half a million people, say experts.
The ministry reports that 100,000 people have already been laid-off, at least temporarily; while another 13,000 have lost their jobs.
“When it comes to exiting this current crisis, we are talking about the need for a hybrid strategy” says EK’s Sami Pakarinen.
“Now at least we have some perspective about what is happening in the coming months. And if we just communicate the economic strategy to get through it, it gives hope to everyone.”