Population 5,5 million
GDP 49,738 US$
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major macro economic indicators

  2017 2018 2019 (e) 2020 (f)
GDP growth (%) 3.1 1.6 0.9 -4.9
Inflation (yearly average, %) 0.8 1.1 1.0 0.2
Budget balance (% GDP) -0.7 -0.9 -1.1 -7.2
Current account balance (% GDP) -0.9 -1.7 -0.5 -2.0
Public debt (% GDP) 61.2 59.5 59.4 68.1


(e): Estimate. (f): Forecast.


  • Prudent economic policy
  • Skilled workforce and favorable business environment (No. 10 in the Doing Business 2020 ranking)
  • High standard of living


  • Highly vulnerable to international economic conditions
  • Industrial crisis and loss of competitiveness
  • Dependence of the Finnish banking sector on the Swedish and Danish financial sectors, despite the return of a major institution in 2017
  • Ageing population

Risk assessment

COVID-19 aggravates economic weakness

There were signs that pointed to a recession in Finland before the COVID-19 crisis broke out. In the fourth quarter of 2019, the economic growth rate turned negative (-0.3% QOQ) and remained there in the first half of 2020 (Q1 2020: -1.9% QOQ, Q2 2020: -3.2% QOQ). In all cases, private consumption was a main drag to economic activity. While in Q4 the decrease in inventories also played a major role, the restrictions around COVID-19 have aggravated the negative economic trend in 2020. However, surprisingly, the economic contraction in the second quarter of 2020 in Finland remained very small in comparison to other European countries. Although the first case of COVID-19 was detected in late January in Finland, the pandemic spread at the end of February to reach its peak in April. Nevertheless, strict regulations have limited the number of cases to 7,486 (as of August 4, 2020), representing 0.14% of the population. This, alongside “only” 331 deaths, testifies that Finland has been the most successful country in Northern Europe in fighting the pandemic, so far. At mid-March, Finland declared the state of emergency (for the first time since World War II) and closed all schools and universities, as well as restaurants and cafés (except for take away). Gatherings were limited up to 10 persons and borders were closed to all non-essential travel. In addition, the Helsinki-Uusimaa region was quarantined from the rest of the country for three weeks. A harsh lockdown with curfews or the closing of shops was avoided. May onwards, the restrictions were slowly lifted, with borders opening for the EU/EFTA and some other countries in mid-June.


The current recession should reach its nadir in the second quarter of 2020. The recession was cushioned by the government, which introduced several supplementary budgets for 2020. The total value of the support packages should be around EUR 23.8 billion (10% of GDP) and include grants for businesses, extension of unemployment security (e.g. extending the payment period for insurance) and social benefits to support households. In addition, the government introduced loan guarantees for firms and easing of payment terms for taxes. Capital requirements at credit institutions were lowered to support their lending capacity. The ECB supported the financial market in the Eurozone via the widening of its existing Assets Purchase Programme by EUR 120 billion and a new Pandemic Emergency Purchase Programme with a scope of EUR 1,350 billion until at least the end of June 2021. While the ECB kept its interest rates unchanged, it introduced additional longer-term refinancing operations at a low rate of -0.5% (equal to the deposit rate). From the second half of 2020 onwards, the economy should show a gradual recovery, which will be mainly dependent on personal consumption and foreign trade.


Personal consumption should show a timid comeback, as the confidence indicators reached an 18-month high in July. However, the labour market showed a tepid improvement in May and June, with a tiny jump of around 1.8 percentage points compared to 2019, reaching a 3-year-high, though. The outlook for exports is highly dependent on the development of the industry sector in the main export destinations - Sweden, Germany and the US - as most Finnish export goods are input goods..


Public debt shoots up

Finland’s current account deficit will increase only moderately in 2020. The reason is that, in comparison to other Nordic countries, Finland has usually a negative tourism balance, which means that the closure of borders is positive for the Finnish economy. Moreover, imports are expected to decrease substantially during the recession (although not as much as exports). However, the general government budget deficit should shoot up in 2020, way above the Maastricht-target of 3%. This nullifies the work of governments to bring down public debt below the Maastricht-target of 60% since the Great financial crisis.


COVID-19: a confidence boost for the government

Social Democrat (SDP) Sanna Marin is leading a centre-left coalition with four other parties – the Centre Party (KESK), the Green League (VIHR, environmentalist), the Left Alliance (VAS) and the Swedish People’s Party (SFP, centre) –, following a narrow victory in the April 2019 parliamentary elections (with 17.7% of votes). Due to the fast and comprehensive measures to fight Covid-19, the government, especially the SDP, gained a lot of support. In polls, the party is now clearly leading with 23% of support, while the right-wing populist Finns party, the biggest opposition party in the parliament, lost the extra support gained between the last election and early 2020 and fell back to its election result of 17%. Another reason for this development could be the government’s position in the negotiations on the EU Recovery fund, where PM Marin was part of “the frugal five” (an alliance with the Netherlands, Austria, Denmark and Sweden to support a frugal and strict fiscal policy in the EU). Due to the latest boost in support, the government coalition and PM Marin should continue their work until the next general election in 2023.


Last updated: August 2020


Bills of exchange are not commonly used in Finland because they signal the supplier’s distrust of the buyer. A bill of exchange primarily substantiates a claim and constitutes a valid acknowledgment of debt.


Cheques, also little used in domestic and international transactions, only constitute acknowledgement of debt. However, cheques that are uncovered at the time of issue can result in the issuers being liable to criminal penalties. Moreover, as cheque collection takes a particularly long time in Finland (20 days for domestic cheques or cheques drawn in European and Mediterranean coastal countries; 70 days for cheques drawn outside Europe), this payment method is not recommended.


Conversely, SWIFT bank transfers are increasingly used to settle domestic and international commercial transactions. When using this instrument, sellers are advised to provide full and accurate bank details to facilitate timely payment, while it should not be forgotten that the transfer payment order will ultimately depend on the buyer’s good faith. Banks in Finland have adopted the SEPA standards for euro-denominated payments.


Debt collection

Amicable phase

The goal of the amicable phase is to reach a voluntary settlement between the creditor and debtor without beginning legal proceedings. Finnish legislation obliges creditors to begin the amicable phase amicable phase via letters, followed up as necessary with a final demand for payment by recorded delivery or ordinary mail. This demand for payment asks the debtor to pay the outstanding principal increased by past-due interest as stipulated in the contract.


In the absence of an interest rate clause in the agreement, interest automatically accrues from the due date of the unpaid invoice at a rate equal to the central bank of Finland’s (Suomen Pankki) six-monthly rate, calculated by reference to the European Central Bank’s refinancing rate, plus seven percentage points.

The Interest Act (Korkolaki) already required debtors to pay up within contractually agreed timeframes or become liable to interest penalties.


Since 2004, the ordinary statute of limitations for Finnish contract law is three years.


Legal proceedings
Fast-track proceedings

For clear and uncontested claims, creditors may use the fast-track procedure, resulting in an injunction to pay (suppea haastehakemus). This is a simple written procedure based on submission of whatever documents substantiate the claim (invoices, bills of exchange, acknowledgement of debt, etc.). The court sets a time limit of approximately two weeks to permit the defendant to either respond to or oppose the petition. In addition, this fast track procedure can also be initiated electronically for cases of undisputed claims. The presence of a lawyer, although commonplace, is not required for this type of action.


Ordinary proceedings

Ordinary legal action usually commences when amicable collection has failed. A written application for summons must be addressed to the registry of the District Court, which then serves the debtor with a Writ of Summons. The debtor is given approximately two weeks to file a defence.


During the preliminary hearing, the court bases its deliberations on the parties’ written submissions and supporting documentation. The court then convokes the litigants to hear their arguments and decide on the relevance of the evidence. During this preliminary phase, and with the judge’s assistance, it is possible for the litigants to resolve their dispute via mediation and subsequently protect their business relationship.


Where the dispute remains unresolved after this preliminary hearing, plenary proceedings are held before the court of first instance (Käräjäoikeus) comprising between one and three presiding judges, depending on the case’s complexity.


During this hearing, the judge examines the submitted evidence and hears the parties’ witnesses. The litigants then state their final claims, before the judge delivers the ruling, generally within 14 days.


The losing party is liable for all or part of the legal costs (depending on the judgement) incurred by the winning party. The average time required for obtaining a writ of execution is about 12 months. Undisputed claims in Finland can normally last from three to six months. Disputed claims and the subsequent legal proceedings can take up to a year.


Commercial cases are generally heard by civil courts, although a Market Court (Markkinaoikeus) located in Helsinki has been in operation as a single entity since 2002, following a merger of the Competition Council and the former Market Court.


Enforcement of a Court decision



A judgment is enforceable for fifteen years as soon as it becomes final. If the debtor fails to comply with the judgment, the creditor may have it enforced by a bailiff, who will try to obtain an instalment agreement with the debtor, or enforce it through a seizure of assets.


For foreign awards, since Finland is part of the EU, it has adopted enforcement mechanisms applicable to court decisions issued by other EU members, such as the EU Payment Order and the European Enforcement Order. For judgments issued by non-EU members, the issuing country must be part of a bilateral or multilateral agreement with Finland.


Insolvency proceedings

Out-of-Court proceedings

Finnish law provides no specific rules for out-of-court settlements. Negotiations between creditors and debtors are made informally. If an agreement is reached, it must still be validated by the court.


Restructuring proceedings

The goal of restructuring is to allow an insolvent company to remain operational through administration, with the view that if the company is able to continue its business, it will be able to repay a larger part of its debts than would have been possible in the case of bankruptcy of the company. The commencement of these proceedings triggers an automatic moratorium, providing the company with protection from its creditors.


The board of directors maintains its power of decision but the receiver is entitled to control certain aspects of the company’s operations, including the creation of new debts and overseeing transfers of ownership.



When debtors are unable to pay their debts when due and this inability is not temporary, they are placed into liquidation. Upon acceptance of a liquidation petition by the court, the debtor is declared bankrupt. A receiver is appointed, and a time limit is established for any creditors to present their claims. The receiver then establishes a proposed distribution scheme, whilst creditors supervise the selling of the estate and the distribution of the sales’ proceeds.

Insolvency trend Finland
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