The report reviews the support measures that were introduced for companies in Finland due to the coronavirus pandemic. The support measures have been divided into public business subsidies, i.e. grants, and loans, guarantees and market-based financing. The report compares Finland’s coronavirus support policy to support measures and economic development in Sweden, Norway, Denmark, Germany and Great Britain. By international standards, the business subsidies granted due to the pandemic have been small in Finland. The coronavirus support measures have been relatively effective and well-suited.
An econometric analysis of the causal effects of the State Treasury’s business cost support indicates that the support has increased companies’ turnover and reduced their risk of debt restructuring. Our calculations show that some of the companies that otherwise would have been loss-making during the coronavirus pandemic have turned profitable due to business cost support.
Our analysis suggests that direct support and temporary amendments to bankruptcy legislation can effectively protect economic structures in sudden crises. In a prolonged pandemic, however, the ongoing new rounds of support have probably slowed down a beneficial structural change of the economy. For persisting crises, it would be important to formulate an exit strategy that includes a clear deadline for ending crisis support measures so that the economy can renew more swiftly.
Publications of the Ministry of Economic Affairs and Employment 2022:39.