HELSINKI • The new Finnish government's rejection of immigration will hamper its pledge to drag the economy out of its three-year recession, according to the chairman of EK, the country's main business group.
"Lack of competition in the job market becomes a hurdle for growth," Mr Jyri Hakamies said in an interview in Helsinki this week. There is a lack of skilled workers, particularly in real estate management, restaurant and care industries, he said.
Immigration has become a hot topic in the nation after the nationalist Finns Party became part of the government for the first time this year amid record refugee flows in Europe. The party, headed by Foreign Minister Timo Soini, in May blocked a plan by its coalition partners to abolish a law that mandates priority to unemployed Finnish citizens over people with similar skills from non-European Union countries.
Finland's economy has been shrinking for the past three years, hit by falling demand in its vaunted paper industry and the collapse of its consumer electronics industry, once led by Nokia Oyj. Now, sanctions on Russia are also weighing on trade with its eastern neighbour.
While unemployment has reached 10 per cent, Statistics Finland estimates that 80 per cent of those without jobs are a poor match for the available jobs. They are either too old, do not have the appropriate education or skills, or live in rural areas.
At the same time, some 10,000 people a year are exiting the job market as post-war baby-boomers retire and much smaller generations are left to fill the gap.
That is in sharp contrast to neighbouring Sweden, where the job market is expected to expand by 33,500 people a year over the next decade, according to a report from Eurostat, the EU's statistics agency.
Nordea Bank AB, the biggest Nordic bank, in a report this week, said supporting "work-related" immigration should be part of a package to help Finland get back on its feet.
"It is hard to see Finland managing to prosper without the help of immigration," Nordea analysts said in the report.
BLOOMBERG
