Finland needs to plough cash into supporting businesses, and then quickly cut spending and increase taxes after the coronavirus crisis.
That's the recipe for success cooked up by a working group of senior economists asked by the Ministry for Economic Affairs and Employment to report on the economic impact of the virus.
Led by Vesa Vihriälä from the market-oriented think tank Etla, the group says Finland's GDP could shrink this year by between five and thirteen percent.
To ride out that storm, support packages for businesses are required before that spending is clawed back through reductions in spending and increases in taxes.
"Our relatively pessimistic understanding is that this year there will be a big drop in production and recovery after that will be slow," said Vihriälä at a press conference on Friday.
"If something special doesn't happen in politics here or elsewhere, we are looking at a lost decade a little like that following the 2008 financial crisis."
Concrete suggestions
The group made several concrete suggestions for policies they believe could help Finland manage the crisis.
Education is a key theme, with the group recommending an extension of compulsory schooling in Finland, a Social Democrat policy, along with tuition fees in higher education and an increase in places at universities.
They also advocate structural reforms, including the removal of 'incentives' that encourage people to leave the labour market before retirement age, removing obstacles to foreign workers coming to Finland, and less reliance on centralised labour market bargaining.
The group recommends avoiding higher taxes on work, instead focusing on property taxes and taxing unlisted companies, along with fossil fuels.
The group's members included Nobel laureate Bengt Holmström, professor Roope Uusitalo and economist Sixten Korkman.
