EU cuts new bank deal to help recession-mired Finland

The European Commission has struck a deal with Finnish banks to offer financing at improved conditions for start-ups and small businesses, in the hopes of generating a small economic uplift in recession-hit Finland.

Applying €40 million of mostly EU money, some of which is drawn out of the Horizon 2020 science budget, the new guarantee is expected to stimulate €220 million of investments for 800 local companies.

The deal, announced this week, will also see Finnish banks offer lower interest rates, longer maturities or lower collateral requirements. It was signed between the European Investment Bank Group and three Finnish financial intermediaries, Ålandsbanken, OP Corporate Bank and Oma Savings Bank.

It is hoped the scheme, called the SME Initiative, will give a boost to a country struggling to come out of a long recession.

Finland, the only Nordic country in the Eurozone, has been the worst performing economy in the North of Europe since the big 2008 financial crash.

The pain is leaving its mark on all sectors, not least academia. With the government forced to cut public spending, the country has seen a lot of its talent head for the exit.

“The problem is not that people are moving abroad from Finland; the problem is that they never come back,” said Petri Koikkalainen, the head of the Finnish Union of University Researchers and Teachers, in an interview with Finnish media at the start of the year. “We can’t attract highly-educated international experts to Finland, either.”

“There’s no use debating whether the shrinking university resources are contributing to the growing brain drain. At this point, we should just concede the obvious,” he added.