Erkki Liikanen, the Governor of the Bank of Finland, believes the cost-saving measures drawn up by the Government are not spread evenly among the public. “People are ready to come to terms even with difficult decisions, if they're just and affect everyone,” Liikanen estimated in an interview on YLE's Ykkösaamu on Saturday.

He commented on Friday's massive demonstration by viewing that it was “the basic right of the public” and that the protesters were largely people who believe the austerity measures affect them.

Finland, Liikanen reminded, was lauded as a success story across Europe in the early 2000s. “We've since been hit by more shocks than any other country,” he described the transformation of the country.

The Governor of the Bank of Finland estimated that it is necessary to take immediate action because otherwise “the crane will die before the bog thaws”.

Liikanen also called attention to the significance of keeping costs in check especially in Finland. Wages in the export sectors, however, have not risen excessively, according to him. “Wages in the domestic sector have contrastively risen steeply, and that has deteriorated the global position of Finland,” he said.

It is also vital that the preconditions for innovation activities are in place.

Liikanen was asked by YLE to explain why businesses have nevertheless continued to pay out their profits in dividends instead of investing in innovations. Businesses, he replied, have indeed “in some cases” paid out their profits to shareholders rather loosely, but the decision to do so has been taken by the businesses themselves.

“Businesses that spend money on innovations deserve every bit of our respect and support,” Liikanen told the national broadcaster.

The questions from the viewers dealt largely with tax havens. Liikanen gauged that a considerable change in the attitudes towards tax havens has taken place over the past couple of years. “All countries have woken up to levy the taxes they're entitled to. This is not only right but also necessary,” he said.

Finland has according to him been among the most vocal countries to demand that profits be taxed wherever they are generated. He pointed out that even Luxembourg, which has traditionally approached the issue tepidly, is increasingly willing to plug the leaks.

Luxembourg is one of the largest tax havens in Europe.

“In a ministerial meeting a week ago, Luxembourg forwarded a proposal according to which the tax base of businesses could be the same in different countries but that the base could fluctuate,” he explained.

Tuomo Pietiläinen – HS
Aleksi Teivainen – HT