Is Finland the new sick man of Europe?

In the last quarter, as indicated by Eurostat, all the European Countries have seen increasing their GDP except four: Portugal (0%), Estonia (-0.5%), Greece (-0,5%) and Finland (-0.6%).

The case of Finland, in particular, is worrying and needs to be highlighted.

Helsinki is crossing the worst economic crisis since many years and the outlook for the future is not encouraging. The Minister of Finance himself has defined Finland as "the new sick man of Europe".

There are three main causes of this situation: the crisis of the most important Finnish company, Nokia; the economic weakness of Russia (main importer of Finnish goods) and the high cost of labor.

The ageing population and the difficulties to make labor reforms don't allow to expect a better situation in the imminent future.

Two considerations about Finland.

First, the case of Finland is another sign of a general problem in Europe. Everybody has to follow rigid economic policies that don't consider the differences between one Country and another. But at the same time, nobody can depreciate the value of the currency. The result is a paralysis that can be solved or with a European economic policy or breaking Euro. 

Second, Finland had a strong position against a common policy for the refugees. Another contradiction in Europe: support from Brussels is very welcome, but solidarity is not contemplated.

It is Europe herself to be sick.

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Posh low-cost shops? The way of Tiger

The ways of shopping have deeply changed in the last decade. In particular, the economic crisis has consolidated the growth of the Discount Supermarkets, but it has also left a space for some other kinds of low-cost and posh shops, like the case of Tiger.

Tiger is a variety shop originally born in Denmark. The first store opened in Copenhagen in 1995 and today the chain has 314 stores in Europe and not only (there are also 18 shops in Japan).

What is the origin of this success?

The answer is in the kinds of products sold. Tiger sells quality and fancy products at a quite low price: toys, notebooks, pens, different items for hygiene, stuff for kitchen and many other things.

With the crisis, many people cannot spend  a lot of money. The double idea of Tiger is to sell different item with a low price but that also look nice and appealing. 

It is interesting to point out that, from one side, consumers are always more oriented towards the quality and the good look of the product even if they cannot spend a lot of money. From the other, there is always the way to create a smart and creative business. Even in a such a difficult period like the one we are living in.

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Is ECB the strongest opponent to austerity?

The European Central Bank has chosen the way of a "quantitative easing" to stop the crisis and push the growth. 

The announcement, made by the President Mario Draghi, has been received successfully by the investors and by the most part of the European Countries, except for Germany and the block of Nordics.

The general aim of this operation is that, buying 60 billion Euros of public debt per month, ECB could reduce the value of Euro, facilitating the export and also the access to the bank credit. This decision should increase the inflation tax and bring benefits to all the economy.


The Us Federal Reserve adopted this decision already in 2008, why in Europe did we have to wait till now?

The answer is quite obvious: the resistance of Germany. From Berlin, the  austerity and the internal reforms were the ways to reduce the National debts and improve their economies, without considering the social  (and then also political) effects.

That is why the media reaction to the decision of the ECB has not been positive in Germany. At the opposite, in the rest of Europe the operation has been considered necessary and with positive effects for everybody.

It is impossible to predict which will be the real effect of this decision. But we can draw two considerations. First, this choise is the first wide and robust action of the ECB, as indepent Istitution of the European framework. Second, the economic policy adoped till yesterday must be dismessed because it didn't work.

Euro can be an advantage just if the economic policy can represents and help all the Countries. It is impossible to be under a unique currency and adopting only the German perspective. In the last years we have seen the contraposition between Berlin and the rest of Europe. It seemed that Angela Merkel imposed her strategy to exit from the crisis. But today something is changing: the elctions in Greece and Spain could modify the political scenario in Europe. Over all Mario Draghi won a match against the austerity and maybe he represents the strongest opponent to Germany in the European arena.

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Waiting for Eu Elections: why has Euro been adopted?

Euro, the official currency of 18 members of European Union, is constantly at the center of the public debate since it has been adopted the 1st January 2002.

Especially in the last years, a large part of the public opinion has pointed Euro as the source of all the problems and weaknesses of the European economy.The question at the base of every discussion about Euro is apparently very simple: is Euro an advantage or a load for European Countries? 

Everyone can answer to this question in a very different way and from different points of view. But there is another question, important as well, not everybody can answer to: why has Euro been adopted?

On the website of the European Commission some benefits of a common currency are reported:

More choice and stable prices for consumers and citizens

Greater security and more opportunities for businesses and markets

Improved economic stability and growth

More integrated financial markets

A stronger presence for the EU in the global economy

A tangible sign of a European identity

Moreover, from a technical point of view, at the end of 80s it was clear that building a European single market without a common currency was absolutely impossible. 

History provides the evidence of that. For example, till the unification in 1870, Italy was divided in several small Countries, each one with its own currency. Only after the unification, under a unique currency, the economic integration has been able to grow up. And could we imagine the same economic power of USA, if there were 50 different currencies?

Obviously Eu economic governance doesn’t work well. It is evident to everyone. But it is also true that National Governments very often transfer their responsibilities on Euro, hiding their faults and their weaknesses.

Finally, today travelling from Warsaw to Budapest requires using four different currencies and imply losing money for each transaction. Can we really imagine to crystallize this situation also in the future?

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