Economic Effects of European Union Membership about Finland Prices and Foreign Trade Dissertation



European Union regular membership has an affect on countries both personal and inexpensive aspects. Pertaining to countries who have become an EU member, substential changes in economic signals can be observed as difference in economic composition, change in budgetary policies, fresh interaction with different counrtries, new trade negotiating. In this composition, I will measure the economical affects of EU membership upon Finland when it comes to price level and international trade. Finland joined europe in the beginning of 1995. Inside the 90‟s just before being a member of EU, Finland experienced a recession. GROSS DOMESTIC PRODUCT declined much more than 11 %, unemployment charge increased via 3. 5 to 18. four between 1990 and 1993.

Finnish financial indicators prior to joining the Eu


GDP, change in volume

Difference in CPI

Lack of employment % of labor force

1990 1991 1992 1993 1994 1995

-7. 1 -3. 6 -1. 2 some. 5 a few. 1 a few. 3

some. 3 several. 0 2 . 1 1 ) 1 1 . 0 zero. 5

several. 6 13. 1 18. 9 18. 4 18. 2 18. 3

Resource: Statistics Finland

EU Membership rights on Prices The Average cost level in a single country and the comparison between countries can be used to compute price competitiveness in the country in the world market. Price levels have been often an important sign to determine a country‟s financial condition. Client price in Finland is usually higher than any OECD (Organization for Economic Cooperation and Development) countries before joining the EUROPEAN. Food rates especially had been really high and expected to decline the moment Finland becomes a member of europe. Finland got only low cost level in 1993. The purchase price level decreased below EUROPEAN UNION level, due to deviation at the start of 90‟s and flying of the markka (Finland‟s past currency).

It had been believed that Finland has to use its competitive capabilities to recover this example and since 93 Finnish prices are always more than EU average. It‟s noted that 13 per cent above in 1995 and several per cent previously mentioned in 97, two years following your membership. This decline in price level is a first hint about the impacts of UE membership rights of Finland. Before staying involved in EU, CPI (consumer price index) was very high in Finland. Food prices in specifically higher than various other EU countries because of the gardening policy that been kept over the years. The difference between prices of Finland and the European Union was the main discussion subject before jump. Prices in several countries may differ due to client habits, limited competitiveness, fees, customs responsibilities, protectionist operate barriers. Transportation costs can make a difference in pricing in various countries. Taking a look at the data, it‟s seen that food and alcoholic beverage prices are higher relative to EU, as a result of protectionism laws and regulations in these products. In 1990, consumption expenditure of Finland was more costly than EUROPEAN UNION average. The greatest price big difference is seen in areas including books, cigarettes and alcoholic beverages. In the actual Finland as a member of European UnionFirst encounters written by Ausschlie?liche Hjerppe, Pekka Makela, Likko B. Voipo, 1999, it‟s stated that " Value level of household consumption bills was forty seven per cent above than EUROPEAN UNION average in 1990”. Cost of carbonated drinks and cigarette are 119 per cent higher and books are one hundred fifty five per cent higher than EU typical, as it‟s shown in the table listed below:

Absolute and relative price of Finnish household consuption expenditure in accordance with EU average in 1990, EU=100


Absloute Prices EU=100

Relative Rates EU=100 Household Consumption Expenditure=100

Books Carbonated drinks and cigarettes Meat Materials Hotels

255 229 194 191 one hundred fifty five

174 156 132 140 105

Automobiles and petrol Public transport Milk Fresh fruit Garments Home furnishings Recreational equipment Leisure use Enclosure Telecommunications Home Consumption

152 147 141 139 132 129 123 122 118 102 147

103 100 96 96 90 88 84 83 81 70 100...

Referrals: Hannu Leinonen (1998)”The Finnish economy-ups and downs, and a bit of particles from the market” written for Kai Torvi (1998) " The economic effect of EUROPEAN UNION membership in Finland is primarily positive” crafted for Reino Hjerppe, Pekka Makela, Likko W. Voipio (1999): " Finland as a Member of European Union-First Experiences” Joakko Kiander, Antti Romppanen (2005) " Finland‟s First 10 Years in the European Union Economic Consequences” Ville Kaitila (2005) " 10 Years of EU membership rights for Finland” Sinikka Salo (2006) " Finland- Coming from crisis to a successful person in EU and EMU” through the seminar for Naradowy Traditional bank Polski, Warsaw " Finland‟s trade coverage programme” drafted for website: formin. finland. fi


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