Doomed Firms Suck Up Finnish State Funds as Debt Load Swells
Bloomberg.com • Finland is pursuing a failed policy of using public funds to prop up companies with no hope of surviving on their own, according to the head of the country’s biggest business park operator, Technopolis Oyj.
– “We’re putting a lot of money into saving old industries,” Technopolis Chief Executive Officer Keith Silverang said during a March 10 meeting in central Finland with Pekka Haavisto, the minister in charge of managing state assets. “It’s a waste, we can’t save them.” –
– Finland’s economy has contracted for three of the past five years, depleting state coffers and destroying jobs. As demand for the nation’s forestry products and mobile phones evaporates, Finland has struggled to replace those markets with new growth engines. Industrial production slumped an annual 7.5 percent in January, falling for a 15th consecutive month. –
– The state, through its asset management unit Solidium Oy, is investing about 195 million euros ($270 million) in Outokumpu Oyj (OUT1V), a stainless-steel company that hasn’t booked a profit since 2007. It also accumulated a 16.7 percent stake in Talvivaara Mining Co. (TALV), a nickel miner that’s being restructured in an effort to save 500 jobs. Shares in the company have plunged 87 percent over the past 12 months…Such investments are making it harder for Solidium to deliver the dividends the state needs to plug its budget deficits. To make up for the shortfall, the unit is resorting to divestments to generate cash. –
Read source article here
Those Finnish colleagues who wish to study the subsidization of doomed firms in depth should come to Croatia for a PhD – we specialize in palliative care of doomed firms, and aspire to be the ˝heaven of industries past˝.
As I keep repeating – it doesn’t have to be this way, anywhere…self-destructive policies are a choice…