Prima Magazine

Prima is an economy magazine published eight times a year by the Confederation of Finnish Industries (EK), with a circulation of approximately 35,000. Prima is a magazine for top managers, dealing with subjects related to economy, the business environment and other matters of great interest related to industry and commerce. According to a reader survey, corporate executives find Prima to be a high-quality, expert and important magazine. Prima is mailed to the top management of EK's member companies, important decision-makers in the Finnish society, interest groups, and the media.
 

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Prima 1/2010 briefly:

• Managing Director of the Federation of Finnish Financial Services, Piia-Noora Kauppi, in Prima:
EXCESSIVE FINANCIAL REGULATION THREATENS BUSINESS FINANCING

“If the regulatory measures proposed in Europe are carried out unchanged, businesses will find it increasingly difficult to finance their expansion and investments. New regulations are necessary, but excesses have to be barred,” says Managing Director of the Federation of Finnish Financial Services, Piia-Noora Kauppi, in an interview with Prima, published on Thursday, 4 February.

According to Kauppi, the kind of simple leverage ratio being advocated in the US would have a negative effect on European banks and especially for the retail-banking intensive actors in Finland, and it would easily turn against itself. “The banks’ ability to finance the real economy would be compromised and, consequently, funding would become more expensive. The solvency requirements should always be in relation to the operative risks, and measures ought to be taken only in sectors with insufficient capital buffers.”

Kauppi emphasises that controlled risk taking is fundamental in banking, and that risk management should be left to professionals. “The core business of retail banking is to accept deposits and provide credit for the real economy, in other words, to channel funds from surplus sectors to deficit sectors. Under all circumstances, banks have to maintain their ability to perform this task while carrying the risks relating to it. If the banks can’t take risks, the markets become dysfunctional.”

• Jorma Eloranta of Metso Corporation:
ACQUIRED BENEFITS MAY TURN AGAINST THEMSELVES

In his editorial in Prima, Jorma Eloranta, President and CEO of Metso Corporation, says that Finland now has to find new, innovative solutions to boost productivity and competitiveness.

“Recently, we have lost more of our price competition edge over other countries. Particularly the increase in production costs has been bigger compared to many of our competitors. If our cost and productivity development continues to be surpassed by our competing countries, the prerequisites for our export industry to operate in Finland will shrink. The competitiveness of our national economy also suffers from the public sector not being able to adjust itself to the changing financial and economic situation.”

According to Mr Eloranta, wages, for example, should be settled in workplace-specific agreements on key issues, harmonising with the company’s reality. “Reforms require new thinking and competence, as well as a genuine local dialogue between the employees and the employer. You can’t generate something new without letting go of some of the old. Productivity-hampering ‘acquired benefits’ may become synonymous to a lost job,” Eloranta writes.

• New SME Director Antti Neimala:
THE GOVERNMENT HAS TO HONOUR ITS PROMISE TO ENTERPRISES

The Confederation of Finnish Industries EK’s new SME Director, Antti Neimala, states emphatically that SME entrepreneurs expect the Government to implement the promised measures to secure and stimulate enterprises. “It’s all there in the Government Programme, the measures just need to be implemented,” Neimala points out.

He notes that the expectations have been high through the Government’s term in office, but there is increasing irritation among SME entrepreneurs because of the meagre results. Moreover, the recession has had a dramatically negative effect on the overall situation. “The Government Programme is becoming an increasingly important steering factor. It states literally that the goal is to offer Finnish enterprises and innovation the best operating environment in the world. The goal is there but, as we all know, it hasn’t been achieved,” Neimala underlines.

“The Government Programme includes measures like stimulation through taxation, reducing bureaucracy related to entrepreneurship as well as opening up public service, improving the service structure and increasing transparency of costs. The programme also talks of better regulation and, most importantly, the Government commits itself to implementing the measures.”

• Sixten Korkman:
MAJOR CUTS NEEDED IN CORPORATE TAXATION

Managing Director of the Research Institute of the Finnish Economy ETLA, Sixten Korkman, says to Prima that the most important factor in future tax reforms, with regard to international competitiveness and economic growth, is corporate tax.

“Finland needs to make substantial cuts in its corporate taxation. I believe that this will be included in the tax reform currently underway. Hopefully, we will not end up increasing the taxation of labour which is high in Finland as it is. More lenient taxation of lower wages would make employment more attractive compared to being reliant on benefits. We also wish to keep our highly educated human resources in Finland, which is why tax reductions are in order at higher wage levels as well.”

According to Korkman, the collected taxes could be balanced through indirect taxation. “Value added tax should be derived from a broad base and at a slightly higher tax rate than today.”

• INCREASED FINNISH INFLUENCE IN CHINA

In the past few years, the Finnish presence has increased remarkably in China, especially in the Shanghai region. There are about 300 Finnish companies operating in the country, and Finnish investments in China amount to about seven billion euros. The biggest investors are Stora Enso, Nokia, UPM-Kymmene and Kone. Moreover, several organisations are working in China with the objective to make Finland better known there. As a unifying power, a new chamber of commerce for Finnish companies is about to be established in Beijing.

“The average person from eastern China doesn’t know much about Finland, and if he or she does, the knowledge is mostly limited to Santa Claus, sauna and Nokia. Our challenge is to make the Chinese elite better acquainted with Finland on a broad base. That is why the Shanghai World Expo 2010 is such an important event,” says Consul General Matti Heimonen at Finland’s Consulate General in Shanghai.

Expo 2010 is Finland’s number one promotion campaign in China and globally in the next few years. Heimonen tells Prima that the potential of the Expo will be utilised the fullest and harnessed to make Finland better known in China. Another aim is to help the Chinese establishment in Finland. “Everything is going to China, but what should we do in order to utilise the Chinese expansion, organisation, capital and get the competence back to Finland? That means a lot of work.”

Director Tero Kosonen of the Finnish Business Council says that because of the fierce competition in China, Finnish companies need to think really hard about their reasons for being in China. The markets have to be analysed carefully. You have to be able to adjust yourself to the market. “You can’t just swagger in, thinking that you’ve struck gold – this is no easy market. You have to send in your best troops and products. And you have to invest especially in recruiting and training the local management.”