Almost half of Finnish firms see hit from Russia sanctions

Reuters

HELSINKI (Reuters) - Almost half of Finland's companies are being hurt by the sanctions the European Union and Russia have imposed on each other over the Ukraine crisis, a survey by the Chamber of Commerce showed on Thursday. Russia is Finland's third-biggest export market, accounting for about 10 percent of total Finnish sales abroad. Russian tourists spend roughly 2 billion euros annually in Finland. The triple-A rated Nordic country has suffered two years of economic contraction as key industries, mobile phones and paper, struggled with weak demand. Finland's gross domestic product edged up 0.1 percent in the second quarter from the first three months of the year, preliminary data showed on Thursday, indicating the economy may be out of its technical recession. But the Ukraine crisis has increased fears the recovery will be delayed. In the survey, 6 percent of firms said they were being hit directly by the sanctions, while 41 percent said they see their businesses suffering from the indirect impact of the sanctions. Of those, one quarter say the impact is significant. But half the respondents said the sanctions were justified, while 16 percent would like to see more forceful action. Some 24 percent of managers surveyed did not approve of the sanctions. The European Union has imposed sanctions on Russia over its annexation of Crimea and support for separatist rebels in eastern Ukraine. Russia retaliated by banning EU food imports. "The survey shows that businesses understand the use of sanctions in the current political situation," Risto Penttila, who heads the Chamber of Commerce, said in a statement. Some 79 percent of respondents said they are in wait-and-see mode regarding business in Russia, 3 percent are shelving expansion plans in the country and 0.5 percent will exit the eastern neighbor's markets. The survey of 2,676 managers was conducted on Aug. 8-12. It included both large and small firms. (Reporting by Sakari Suoninen; Editing by Janet Lawrence)