By Juhana Rossi
HELSINKI--As tensions between the European Union and Russia
worsen, Finland is emerging as one of the remaining points of
resistance to stiffer sanctions against Moscow.
The Nordic nation, which has so far opposed major economic
boycotts of Russia, is finding itself in a quandary as Europe's
patience with Moscow dwindles in the wake of the downing of
Malaysia Airlines Flight 17. Finland doesn't want to split with
other EU countries, but also has one of the largest stakes in trade
with Russia of any Western country.
While many European policy makers are calling for a tougher line
against Moscow for its alleged backing of separatist rebels in
Ukraine, the Finnish government has made it clear it wants the EU
to tread lightly in its economic measures.
Finland, which shares a 1,300-kilometer land border with Russia,
profits from tourism and trade with its huge eastern neighbor.
Finnish companies such as tire maker Nokian Tyres PLC and
state-controlled utility Fortum Oyj have made Russia the
cornerstone of their growth plans.
At a summit of EU leaders last week, just before the airliner
was shot down over Eastern Ukraine, Finnish Prime Minister
Alexander Stubb lobbied forcefully for limiting the scope of any
new EU sanctions against Russia. On Monday, as the rebels were
impeding international access to the site of the plane crash,
Finnish Foreign Minister Erkki Tuomioja continued to call for
restraint in imposing new sanctions.
Other leading European officials, including German Chancellor
Angela Merkel, have spoken with Finnish leaders in recent days,
aware that Finland is among the countries most reluctant to back
stiffer sanctions that target important parts of Russia's
economy.
Finnish suppliers of capital goods to Russia's oil and gas
industry could sustain a major blow if the EU and the U.S. were to
cut off Russian energy companies' access to international finance,
said Kai Mykkanen, a director at the Confederation of Finnish
Industries. "If that happened, it could shave 0.5 percentage points
off Finland's national output and lead to job losses numbering in
thousands, even in tens of thousands," Mr. Mykkanen said. However,
he said this was still a remote worst-case scenario from Finnish
industry's point of view.
The Finnish economy has already been crimped by the weak Russian
ruble, which makes foreign goods costlier for Russians to buy, and
the softening of the Russian economy even before the crisis in
Ukraine. Demand has fallen at Finnish businesses serving Russian
visitors in the eastern part of the country and in Helsinki.
Finnish companies operating in Russia have had to reassess their
strategies and ice expansion plans.
"Finland is already suffering negative effects from Russia's
economic slowdown even without any sanctions," said Arkady Moshes,
a director at the Finnish Institute of International Affairs.
The EU is still some way from a moment of truth that would force
Finland to choose between its economic stake in Russia and its
political desire to stay close to the European consensus, Mr.
Moshes said.
Write to Juhana Rossi at juhana.rossi@wsj.com