Unlike Sweden, Norway and Denmark, Finland was never part of the former Scandinavian Monetary Union, which used the 1873 gold crown / crown until its dissolution at the beginning of World War I in 1914. For its part, Finland continued to use its own currency, the markka, uninterrupted from 1860 until February 2002, when the markka ceased to be legal tender.
Finland had acceded to the European Union (EU) in 1995 and joined the eurozone in 1999, completing the transition process in 2002 when it introduced the euro as its official currency. At the point of conversion, the markka had a fixed rate of six markka to one euro. Today, Finland is the only Nordic country that uses the euro.
Finland and the euro
In January 1999, Europe moved towards monetary union with the introduction of the euro as the official currency in 11 countries. While all the other Scandinavian countries resisted joining the so-called euro zone, Finland embraced the idea of converting to the euro to stabilize its monetary system and economy.
The country has incurred considerable debt in the 1980s, which it matured in the 1990s. Finland lost significant bilateral trade with the Soviet Union after its collapse, concomitantly suffering from depressed trade with the West as well. This led to a 12 percent devaluation of the Finnish markka in 1991 and the severe Finnish depression of 1991-1993, resulting in the markka losing 40 percent of its value. Today, Finland’s main export partners are Germany, Sweden and the United States, while its main import partners are Germany, Sweden and Russia, according to the EU.
Finland and the global financial crises
Finland joined the Third Phase of the Economic and Monetary Union in May 1998 before adopting the new currency on January 1, 1999. Members of the union did not start using the euro as a hard currency until 2002, when it was introduced. euro banknotes and coins. the first time. At that time, the markka was completely withdrawn from circulation in Finland. The euro is now one of the most powerful currencies in the world; 19 of the 28 EU member countries have adopted the euro as their common currency and the only legal tender.
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So far, the Finnish economy has performed relatively well after joining the EU. The country received much-needed financial support, which, as expected, formed a buffer against the trade effects of the 1998 Russian financial crisis and the severe Russian recession of 2008-2009.
But these days, Finland’s economy is reeling again, unable to fully recover from the 2008 global financial crisis, the euro crisis that followed, and the substantial loss of high-tech jobs after failing to keep up with innovations. from Apple and others.
Finland and currency exchange
The euro is named as € (or EUR). The notes are valued at 5, 10, 20, 50, 100, 200 and 500 euros, while the coins are valued at 5, 10 and 20, 50 cents and 1 and 2 euros. The 1 and 2 cent coins used by other eurozone countries were not adopted in Finland.
When visiting Finland, amounts over EUR 10,000 must be declared if traveling to or from a country outside the European Union. There are no restrictions on all major types of debit and credit cards, which means they can be used freely. When exchanging currencies, consider using only banks and ATMs to get the best rate. Generally, local banks are open from 9 a.m. to 4:15 p.m. Monday through Friday.
Finland and monetary policy
The Bank of Finland describes the broad framework of the country’s euro-centric monetary policy below:
‘The Bank of Finland acts as the central bank of Finland, a national monetary authority and a member of the European System of Central Banks and the Eurosystem. The Eurosystem covers the European Central Bank and the central banks of the euro area. It manages the second largest currency in the world, the euro. There are more than 300 million people living in the euro area… Therefore, the Bank of Finland’s strategies are related to national and Eurosystem objectives’.
