Fitch lowered Finland to AA+

Fitch has lowered Finland’s credit rating to AA+ from AAA. The credit rating company still finds Finland’s outlook stable. Moody’s rating for Finland is still AAA, but Standard & Poor’s lowered its rating to AA+ already in October 2014. Nordea’s Chief Economist Aki Kangasharju is not surprised by Fitch’s move. It shows that Finland’s outlook is very weak and that the country has a lot of public debt. Fitch’s message to Finland is that reforms need to be made.

Media:  YLE Uutiset

Date: 11.3.2016

Journalist: Jaana Hevonoja, Iiro-Matti Nieminen

Main source: Aki Kangasharju / Nordea

Commission criticises Finland’s economy – Minister Stubb received personal letter

Helsingin Sanomat writes that Minister of Finance Alexander Stubb received a personal letter on Wednesday urging the government to take action to improve the country’s economic situation. The letter has been signed by the European Commission Vice President Valdis Dombrovskis and Commissioner for Finance Pierre Moscovici. This is the first time the Commission is urging member states with personal letters. In addition to Minister Stubb, a letter was sent to his colleagues in Belgium, Croatia, Italy and Romania. Marketta Henriksson of the Ministry of Finance explains that there is nothing dramatic about the letter, it is just a new idea from the Commission. If Finland breaches the rules, they can say that we have been warned, she adds. In April, Finland will send its public economy plan to the Commission. In practice, the Commission’s letter probably does not affect Finland’s financial policy much.

Ministerial Committee against EU’s deposit guarantee scheme

Finland’s Ministerial Committee on EU affairs does not support EU’s joint deposit guarantee scheme in the current form. The European Commission made a proposal on the issue in November, Helsingin Sanomat writes. Finland has objected to the idea right from the beginning, similarly to Germany. The joint system would strengthen the EU bank system as a whole but it could increase the bank sector risks in countries which have taken care of their duties. The Federation of Finnish Financial Services has strongly objected to the system; it does not want to increase European joint liability.

Media:  Helsingin Sanomat (E-edition)