Unlike Sweden, Norway, and Denmark, Finland was never part of the old Scandinavian Monetary Union, which used the gold-pegged krona/krone from 1873 until the peg was lost at the start of WWI in 1914. Finland, meanwhile, used its own currency, the markka, uninterrupted from 1860 until February 2002, when the markka officially ceased to be legal tender.
Finland acceded to the European Union (EU) in 1995 and joined the eurozone in 1999, completing the transition process in 2002 when it introduced the euro as its official currency. At the point of conversion, the markka had a fixed rate of six markka to one euro. Today, Finland is the only Nordic country to use the euro.
Finland and the Euro
In January 1999, Europe moved toward a standard currency with the introduction of the euro as the official currency in 11 countries. While all other Scandinavian countries resisted joining the so-called eurozone, Finland embraced the idea of converting to the euro to stabilize its floundering monetary system and economy.
The country incurred substantial debt throughout the 1980s, which came due in the 1990s. After the collapse of the Soviet Union, Finland lost an important trade partner while simultaneously dealing with depressed trade with Western nations. This led to a 12 percent devaluation of the Finnish markka in 1991 and the severe Finish economic depression that lasted from 1991 to 1993. Today, Finland’s main export partners are Germany, Sweden, the United States, and the Netherlands, while its main import partners are Germany, Sweden, Russia, and the Netherlands, according to the EU.
Finland and Global Financial Crises
Finland joined the Third Phase of the Economic and Monetary Union in in May 1998 before adopting the new currency on January 1, 1999. Members of the union didn’t start using the euro as hard currency until 2002 when euro banknotes and coins were introduced for the first time. At that time, the markka was completely withdrawn from circulation in Finland. The euro is now one of the world’s most powerful currencies; 19 of 27 EU member countries have adopted the euro as their common currency and sole legal tender.
So far, the Finnish economy performed relatively well after joining the EU. The country received much-needed financial support, which, as hoped, formed a buffer against the trade effects of the Russian financial crisis of 1998 and the Great Recession of Russia in 2008-2009.
Finland and Exchanging Currency
The euro is denominated as € (or EUR). Notes are valued in 5, 10, 20, 50, 100, 200, and 500 euro, while coins are valued at 5, 10, 20,and 50 cents, and 1 and 2 euros. The 1 and 2 cent coins used by other eurozone countries were not adopted in Finland.
When visiting Finland, amounts exceeding 10,000 eurod must be declared if you are traveling to or from a country outside the European Union. There are no restrictions on all major types of debit and credit cards, which means they can be used freely. When exchanging currency, consider using only banks and ATMs for the best rate. In general, local banks are open from 9:15 a.m. to 4:15 p.m. on weekdays.
Finland and Monetary Policy
The following, from the Bank of Finland, describes the broad framework of the country’s euro-centered monetary policy:
“The Bank of Finland acts as Finland’s central bank, national monetary authority, and member of the European System of central banks and the Eurosystem. The Eurosystem covers the European Central Bank and the euro area central banks. It administers the world’s second largest currency, the euro. There are over 300 million people living in the euro area … Therefore, the Bank of Finland’s strategies are related to both domestic and Eurosystem objectives.”
