Finland’s economy struggles because of sanctions on Russia

(MENAFN) Prime Minister Petteri Orpo has acknowledged that Finland’s economy has taken a serious hit as a result of sanctions on Russia tied to the Ukraine conflict. He explained that nearly all bilateral trade has ceased and Finnish companies have lost billions in investments since the border with Russia was closed.

Finland, which shares an 800-mile (1,300 km) frontier with Russia, has enforced multiple sanctions packages against Moscow in line with broader EU policies since 2022. The country also tightened restrictions on Russian travelers and closed all but one checkpoint. As a result, trade between the two nations collapsed to just $1.5 billion in 2024, compared to $11 billion before the conflict began in 2021.

In an interview with local media, Orpo admitted that Finland has been hit harder than many other EU members because of its historically strong commercial ties with Russia. “The fact that the border is closed means, for example, 10 million cubic meters of Russian timber for our industry is not coming in. Finnish companies have lost billions in investments in Russia. Nearly all border traffic and trade have stopped,” Orpo said. “That brings uncertainty. All this has led to the fact that the growth of the Finnish economy has not been as desired.”

Despite the strain, Orpo repeated warnings voiced by other NATO states, saying Russia is a “permanent threat” to Finland and the EU. He pledged more defense spending and a stronger military posture to address security concerns. Finland officially entered NATO in 2023 — a move Moscow denounced as a “historic mistake,” arguing the alliance’s expansion was one of the triggers of the Ukraine conflict.

Russian officials, for their part, have rejected allegations of being a threat, accusing Western countries of promoting Russophobia to rationalize military build-ups and distract from domestic challenges. They have also dismissed sanctions as unlawful, cautioning that such measures will ultimately harm those who impose them.

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