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Report warns Finland to prepare for severe second wave of pandemic

The second part of an exit strategy report focuses on post-pandemic recovery and reconstruction.

Valtiovarainministeriön kansliapäällikkö Martti Hetemäki tiedotustilaisuudessa Helsingissä 8. toukokuuta.
Finance Ministry permanent secretary Martti Hetemäki at a press conference on 8 May. Image: Antti Aimo-Koivisto / Lehtikuva

Government’s emergency planning should prepare for a possible second wave of the coronavirus pandemic that is more severe and more difficult to control than the first, according to a follow-up report to an exit strategy plan prepared for the government.

The warning came as Finance Ministry permanent secretary Martti Hetemäki presented the second part of a government-commissioned exit strategy plan on Monday. The document reportedly focuses on post-pandemic recovery and reconstruction.

According to the report, a more severe second wave could wreak more economic and societal damage, if only because the economic and social situation is weaker now that it was at the beginning of the year.

However it noted that decision-making will likely be easier as a result of experience gained from the implementation of emergency measures and their impact.

The report said that emergency planning should however begin at the same time that recovery programmes start. Planning should also be revised jointly by ministries and administrative bodies.

Looking back to move forward

The report called for the ambitious goal of adopting an epidemiological perspective as was done during the first wave, while at the same time minimising economic and social disruptions.

Hetemäki’s working group called for government to evaluate the effectiveness of the current crisis management structure. It recommended impact assessments and operational alternatives to help support decision making about possible restrictions.

The report also noted that during the first phase of the pandemic, there was no clear division of responsibilities among administrative branches. The working group said this should not be repeated so that all essential operation players such as relevant agencies and institutions can be involved in future planning.

Focus on youth employment and education

The report noted that the economy will not rebound unless consumer and industrial confidence are restored. As a result tamping down the spread of the virus and preventing new infections are also critical for economic recovery, it stressed.

Covid-19, the disease caused by novel coronavirus is especially dangerous for the elderly, but the economic disruption it causes affects the working age population, the working group said. The crisis also has had a significant impact on children and young people and the effects may be long-lasting, it added.

The crisis has disproportionately affected services, but the outlook is also dim in the industrial sector. There is therefore a risk that recovery will take a long time.

In the event that the crisis is protracted, government must prepare for long term unemployment and joblessness may also become structural, Hetemäki’s experts warned.

They also pointed out that economic crises often first hit youth employment and people entering the job market during a time of upheaval and that this could have long-lasting consequences for their income growth. As a result, post-pandemic recovery should pay special attention to youth employment and wellbeing as well as ensuring education and study places.

Support for selected enterprises

If the crisis is prolonged it will not be possible for government to support all businesses. The report referred to a separate analysis by Vesa Vihriälä of the partially business-backed think tank Etla, which called for government to decide which enterprises are most important to society and to focus aid on those firms.

The report stressed promoting exports and exploring new export destinations. It advised investing in a local presence and customised services to meet the needs of export companies.

It highlights the need to promote a green recovery and carbon neutral goals. It recommended that Finland aim to adopt a pioneering role in climate work, which would in turn spawn innovations that could create new jobs and bolster the economy as well as exports.

The coronavirus crisis will cause the sustainability gap in public finances to grow and eliminating it in the near future is not a realistic goal, according to the working group.

The report recommends drawing up a roadmap with a timetable and a range of options to rebalance public finances once the crisis is over, although decisions about specific measures will be taken later.

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