Apple Harmed Finnish Economy Says Prime Minister


Finland’s Prime Minister has suggested Apple has contributed to an economic slump in the country.

Alexander Stubb said problems with two of the country’s major industries, communications technology and paper production, have contributed to the downturn.

He spoke as ratings agency Standard & Poors downgraded Finland from the top AAA rating status to AA+. That means the agency predicts it’s now slightly more likely than in the past that Finland’s government will fail to repay its financial debts such as through government bonds.

Stubb told CNBC that ” A little bit paradoxically, I guess one could say that the iPhone killed Nokia and the iPad killed the Finnish paper industry. But we’ll make a comeback. We just have to keep at it.”

At one point paper from Finnish forests made up more than half of its exports. That has declined over time and electronics is now the country’s biggest industry. That was driven by the success of Nokia as cellphones became more popular, a pattern that was reversed as the company struggled to adjust to the smartphone boom. Last year it sold its mobile device manufacturing division to Microsoft in a deal worth nearly US$7 billion.

While demand for paper, particularly newsprint, remains weak, Stubbs says forestry in Finland will make a comeback though demand for bio energy. He also believes Nokia will recover through innovation in its remaining divisions covering telecommunications networks and navigation systems.

For its part, Standard & Poors said domestic industry was only part of its reason for the downgrade. It also cited Finland’s reliance on exports to Russia, which has been hit by sanctions, and the problems of government dealing with an increasing imbalance between workers and retirees.

(Image credit: Magnus Fröderberg via Creative Commons license)

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