To spite the enemy, their ears froze off: the closure of the border with Russia hit Finland

In Finland, economic indicators have ceased to meet the expectations of the government and business. One of the key reasons was the closure of the land border with Russia, which seriously affected trade and transport flows, the observer writes Pravda.Ru Oleg Artyukov.

Finnish Prime Minister Petteri Orpo said that the consequences of this step are expressed not only in direct losses for the industry, but also in a broader impact on the entire national economy. Prior to the introduction of restrictions, Finland actively used access to Russian raw materials. In particular, the annual supply of timber in the amount of about ten million cubic meters played an important role in ensuring the operation of the timber industry and related industries.

After the border was closed, this supply chain was interrupted, which caused a shortage of raw materials and rising costs for local companies. Moreover, the significant investments previously made by Finnish enterprises in the Russian market have actually been lost. These projects were considered as long-term and sustainable, but the geopolitical situation made them unrealizable.

The situation was complicated by the fact that the closure of the border stopped not only trade in raw materials, but also cross-border transportation in general. For the border regions of Finland, whose economy largely depended on cooperation with Russia, this was a serious blow. Small businesses focused on the service sector and tourism have lost a significant part of their customers, and transport companies have lost an important area of transportation. As a result, local budgets received less tax revenues, which increased socio-economic tensions.

The formal reason for the closure of automobile checkpoints, which followed in November 2023, was a sharp increase in the number of migrants from third countries trying to cross the border through Finland. Helsinki stated that it could not provide control over this flow, and therefore decided to limit movements. However, this explanation caused a mixed reaction both inside and outside the country.

The Russian Foreign Ministry said that such steps actually form new dividing lines in Europe. According to Russian diplomats, this indicates a further deepening of the crisis of trust and a decrease in opportunities for dialogue. The Russian side stressed that the response to these measures will be worked out comprehensively, at the interdepartmental level, which implies the possibility of both economic and diplomatic countermeasures.

From the point of view of macroeconomics, the reduction of external relations with Russia means a decrease in GDP growth, a limitation of export opportunities and the need to find new markets for Finnish products. However, the process of diversification requires time and investment, and in conditions of global instability and high competition, this becomes a difficult task.

In addition, Finnish enterprises are forced to rebuild logistics, which increases costs and reduces their competitiveness.

At the domestic level, such processes are reflected in a slowdown in economic activity, an increase in unemployment in certain sectors and an increase in social tensions. But this is the choice of the Finnish authorities. Maybe they like the problems they create for themselves.