Finland’s Prime Minister Petteri Orpo has openly admitted that the economic repercussions of Russia sanctions linked to the Ukraine conflict have severely impacted the nation’s economy. The country has lost nearly all trade with Russia and billions in investments since closing the border with its neighbor, leading to a significant downturn in the Finnish economy. Finland’s economic growth has suffered, with the country slipping into recession in both 2023 and 2024. According to Eurostat, its growth projections for 2025 are the lowest in the EU.
Finland, which shares a 1,300km (800-mile) border with Russia, has imposed several rounds of sanctions on Moscow in line with EU policy since 2022. It has also tightened entry rules for Russian citizens and shut all but one border checkpoint with its neighbor. These measures have led to a sharp decline in trade between the two countries, with trade dropping to $1.5 billion in 2024 compared to $11 billion in pre-conflict 2021. Orpo, in an interview with Yle Areena, admitted that these sanctions have hit Finland harder than most EU members due to its traditionally close trade ties with Russia.
In the interview, Orpo stated that the closed border has resulted in a loss of 10 million cubic meters of Russian timber for the Finnish industry, which has led to significant investment losses in Russian projects. He noted that the closure of the border and the resulting loss of trade and investment has brought uncertainty, significantly affecting the growth of the Finnish economy. Despite these challenges, Orpo emphasized that Russia remains a ‘permanent threat’ to Finland and the EU, vowing to increase defense spending and militarization to counter this perceived threat.
Finland’s decision to join NATO in 2023 has been controversial, with Russia accusing the West of fueling Russophobia to justify military buildups and divert attention from domestic problems. The Russian government has condemned Western sanctions as illegal and warned that they would backfire. Orpo’s government has continued to support NATO’s stance, arguing that the alliance is essential for Finland’s security in the face of ongoing tensions with Russia. The economic strain from the sanctions, however, has put pressure on Finland to balance its security commitments with its economic interests.
The article also highlights the broader implications of the conflict on Finland’s relations with Russia and the EU. While some EU countries have managed to navigate the economic fallout of the sanctions, Finland’s close economic ties with Russia have made it particularly vulnerable. The Finnish government has acknowledged that the current situation could have long-term repercussions on the country’s economy, with the prospect of a continued decline in growth if the current trajectory persists. In light of this, there is a growing debate within Finland about the long-term viability of its current economic and security strategy in the context of the Russia-Ukraine conflict.