Finland is the world's most democratic and least corrupt nation. It's also at or near the top of most other league tables. Finland won this year's Eurovision Song Contest. Now it is holding the rotating presidency of the European Union.
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In praise of Finland
Jul 6th 2006
From The Economist print edition
What the European Union should learn from its new president
“IN THE cave they listened and listened but all they heard was silence.” So begins the climax to Tove Jansson's “Comet in Moominland”, one of Finland's greatest contributions to children's literature. It concludes: “‘Mamma,’ said Moomintroll, ‘is it all over now?’ ‘Yes, it's over, my little Moominchild,’ said his mother. ‘Now everything is all right.’”
In Finland now, everything is all right. Fifteen years after one of the worst recessions any European country has seen, triggered by the collapse of the Soviet Union, Finns are not exactly merry (that would hardly suit the national temperament), but they are content. Their small country (5m people) is at or near the top of most league tables: first in the World Economic Forum's list of most competitive countries, and second in its business-competitiveness index; first in the OECD's world ranking of educational performance; second-highest share of R&D spending in the European Union. The country is reversing its demographic decline: its fertility rate is one of the highest in Europe. A Finnish group even won this year's Eurovision song contest.
Finnish Prime Minister Matti Vanhanen
Perhaps best of all, the Finns are facing globalisation without paranoia. Theirs is one of the few European countries to have succeeded in businesses (notably mobile phones) in which international prices are falling because of global competition and technological change. In most of Europe public opinion and even business elites seem gloomily resigned to being overwhelmed by India and China. Finland suggests that this fate is not inevitable. So, in the week when Finland takes over the rotating six-monthly presidency of the EU, it is worth asking: what would Europe be like if it were more like Finland?
It would, for a start, be in better fiscal shape. For some years, Finland has been running proportionately the biggest fiscal surplus in the euro area. This is a result of prudence over the long haul, not just when the going was easy. In contrast, most other euro-area countries have insouciantly breached the fiscal rules set up before the launch of the single currency (though Germany's imposition of one of its biggest tax increases since the war may signal a return to fiscal austerity).
Were it to ape Finland, the EU would also be readier to see money and people shift from declining to growing industries. Even in the depths of the recession, when construction companies hammered by lost Soviet contracts begged the government to bail them out, Finland chose instead to spend its money on retraining workers for technology jobs. Finns see the benefits every waking moment: Nokia, which once made gumboots, turned to mobile phones. Indeed, this single company may now be dangerously dominant: it accounts for a quarter of Finland's exports and a big chunk of R&D spending.
European countries would also pay more attention to skills, knowledge and education. That does not necessarily involve spending lots more money. The Finns spend no more than average on education and they have invested hugely in biotechnology, with little to show for it. The real lesson from Finland is, rather, that organisation makes the difference.
Finland pays teachers well, gives them an unusual amount of discretion (no “teaching to the test”) and backs them up if they ask for help. In many other European countries, universities are proud of being founded in medieval times, and are often housed in medieval or classical buildings (or, if they do not have them, in replicas somewhat reminiscent of American east-coast campuses). Finnish universities, in contrast, tend to be gleaming steel-and-glass affairs, visible expressions of the link between knowledge and modernity.
Perhaps most important, if Europe were more like Finland, its governments would have retained their ability to take tough political decisions. They would not have let it slip by caving in to protests or sponsoring reforms that they could not make work (France this year, Germany under the Schröder government). Nor would they have squandered political capital on grand, rhetorical projects that raised public suspicions, such as the failed EU constitution.
Consider the case of nuclear energy. Like most Scandinavian countries, Finland has a powerful green movement opposed to nuclear power. Yet Finland is now building a fifth nuclear-power station. This is not because the government has rammed it down hostile voters' throats. Rather, it persuaded the electorate that there was a serious energy problem, announced that parliament would take a decision on a certain date—and promised to respect the decision, whatever it was. Having reassured people of a meaningful debate, it put forward a nuclear-power proposal and proceeded to win the argument.
Finland has also managed to push through significant reforms in its pension system. Only last week it shook up municipal government. That is a first step towards reforming social services in time for the baby boomers' retirement, since the delivery of public services in Finland is mostly in the hands of municipalities—another lesson for the rest of Europe.
Back to reality
Of course, the EU could not really be turned into a big Finland. No other country depends on one company as Finland does on Nokia. Few are as small, open or ethnically homogeneous. And if the rest of Europe were more like Finland, it would have even more inefficient farmers (the average dairy farm in Finland has 20 cows). It would not have more jobs (Finnish unemployment is high) and it would be stuck with a rigid incomes policy that is only now being loosened.
Yet the bigger danger for Finland is complacency. Policy wonks now flock to Helsinki to learn from the country's example. As a rule, when this happens, it is too late: you are already complacent, and your miraculous performance is over. That is not a lesson that European countries need to learn.
economist.com
Facts about Finland
Area - 338,145 sq km [[slightly smaller than Montana]] (Britain - 244,820 sq km)
Population - 5 million (Britain - 61 million)
It is the only Nordic member of the EU to have the Euro currency. Sweden and Denmark, like Britain, kept their original currencies.
Finland was a province and then a grand duchy under Sweden from the 12th to the 19th centuries and an autonomous grand duchy of Russia after 1809. It won its complete independence in 1917.
Amazingly, forests cover three-quarters of its entire surface.
It's the 6th largest country, in terms of area, in Europe - after Russia, Ukraine, France, Spain and Sweden.
Even though the language has no grammatical gender and has no words for "the" or "a/an", it is incredibly difficult to learn. Each noun takes 15 different forms depending on how they are used in a sentence. In English, each noun only takes three forms - e.g car/cars/car's.