Researchers say EU membership has been cheap for Finland
|
|
|
Finnish membership in the European Union has cost this country less than expected. According to figures put out by the Government Institute for Economic Research (VATT), each Finn has paid an average EUR 25 annually into the coffers of the EU - somewhat less than other net contributors.
According to researchers, neither the feared collapse of agriculture, nor the weakening of the tax base have occurred.
The Finnish foodstuffs industry has had to cut costs, but it has remained robust. There has been an increase in food imports, but exports have grown at the same pace.
On the other hand, consumer prices are still about 20% higher than the EU average.
VATT researcher Jaakko Kiander feels that the costs of membership have been low when set against what it has brought.
Kiander and another researcher, Antti Romppainen, drafted a report for VATT on the impact of ten years of membership on the Finnish economy.
During this time economic progress in Finland has generally been positive. However, the researchers say that it is difficult to determine which aspects are the result of EU membership, and which would have been achieved even if Finland would have remained outside the EU.
Norway stayed out of the EU, and its economic development has been better than that of Finland - for a number of reasons specific to its case.
Sweden joined the EU, but opted out of the common currency, and its development has been at least as good as that of Finland.
The experts nevertheless conclude that the Finnish economy would not have done any better outside the EU.
In 1992 VATT was commissioned to analyse the possible impact of EU membership. Many things have gone differently for Finland than was anticipated at the time, and development of the EU as a whole has also differed from expectations.
The worst fears were never realised. The greatest concern was for the future of Finnish agriculture, the erosion of the tax base from tax-based competition and harmonisation, and the deterioration of the welfare state.
Farming has done better than expected, with agricultural production staying at approximately the same level as before. Agricultural investments have grown, and farm exports have increased.
The positive development is attributed to increased farm sizes and better productivity. Producer prices have decreased by about 50%, but agricultural subsidies have also gone up.
The Finnish foodstuffs industry has also prospered. The sector has experienced consolidation, and its productivity has risen by about 25%. The 10% decline in employment in the sector is less than expected. Food imports have increased, but so have exports.
Before EU membership there were fears that tax harmonisation might lead to shortfalls in tax revenues of about EUR 2.5 billion.
Tax harmonisation never took place, and tax cuts that resulted from EU membership have remained fairly small. The researchers say that Finland has managed to postpone the implementation of tax cuts by nearly ten years.
The cuts that were implemented have not led to any significant reduction in tax revenues, and all Nordic Countries have maintained a fairly high income tax level.
There were expectations that EU membership would lead to increased trade specifically with other EU countries. However, Finnish exports to areas outside the Union have actually grown more.
In this respect, technological development has been more significant in altering Finnish structures than EU membership.
Helsingin Sanomat
|
| 21.4.2005 - TODAY |
 Researchers say EU membership has been cheap for Finland
|
|
