Decreasing confidence in Russia hurts Finnish economy

Decreasing confidence in the Russian economy is hurting the Finnish economy, said Erkki Liikanen, the governor of the Bank of Finland on Saturday. Liikanen said that confidence in Russia started to reduce as early as in the early stage of the Ukraine crisis, resulting in the weakness of Russian ruble, reported the Finnish Broadcasting Company YLE. The devaluation of ruble has directly affected Russia's imports from its trading partners including Finland. The chief of Finland's central bank pointed out that before the sanctions imposed by the European Union (EU) and the United States, the Russia-Ukraine conflict had already critically impacted on the two countries' major trade partners, such as Finland, Poland and Baltic countries. "The ruble began to weaken in exchange rates as early as last autumn, so interest rates have risen and stock markets have plummeted. When economic activity deteriorates in this way, it affects our exports and also Russia's capacity to import high technology," said Liikanen in an interview with YLE. Liikanen also claimed, "It's extremely important that the EU sanctions affect all member states equally." The EU announced on Friday that its sanctions against Russia were widened to 33 individuals, including Russian and Ukrainian officials. Meanwhile, the sanctions imposed by the United States have also become heavier with travel bans and asset freezes. Russia is one of Finland's most important trade partners. The share of exports to Russia accounted for about 10 percent of Finland's total exports in 2012. Finland's exports to Russia totaled 5.4 billion euros (7.45 billion U.S. dollars) in 2013, which decreased by 6 percent from 2012; while imports from Russia was 10.5 billion euros last year, declined by 1 percent from one year earlier. (1 euro = 1.38 U.S. dollars)