Finland and India Improve Economic Relationship with a New Trade Agreement

Minister of Commerce and Industry Anand Sharma of India and Minister for Foreign Trade and Development Paavo Väyrynen of Finland signed a new agreement to promote economic cooperation between the two countries this past March. This agreement of cooperation will involve the exchange of information on statutes influencing the economy and improve the trade relationship between both countries. Both countries will appoint representatives to a joint commission that will meet at least every second year to discuss trade opportunities and ways to internationalize both Indian and Finish businesses. Trade between Finland and India has increased vigorously during the 2000s. Last year the value of exports was 450 million euros and that of imports was 230 million euros into the Finnish economy from India alone. One specific example of trade motioned during this convention was the introduction of Nokia cell phones into India during the mobile communications boom which has since increased its presence in both production and research. According to Indian statistics for January, the number of mobile phone subscriptions increases in the country at the rate of 15 million each month. The figure Finnish conglomerate Nokia gave was 19.5 million subscriptions per month. Minister Sharma of India stated that his country has the world’s second fastest economic growth rate and ensures that those who invest into India, like Finland, can expect profitable gains for their country.

http://formin.finland.fi/Public/Print.aspx?contentid=188954&nodeid=15145&culture=en-US&contentlan=2

[Picture of Anand Sharma and Paavo Väyrynen after finalizing trade agreements between Finland and India]

Making Monetary Policy

As you know, a monetary policy is used to regulate the supply and availability of money within an economy to provide predictable and stable inflation and interest rate fluctuations. In the United States, the economic sector of the government will evaluate the current state of the economy’s money supply and adjust it accordingly for the best results. Finland; however, does not single handedly create monetary and economic policy for its economy because it is part of the Euro zone which shares currency with other European nations. The Euro system is composed of the national central banks (NCBs) in the euro area and the European Central Bank (ECB) in Frankfurt Germany. Because Finland participates in the Euro system the Bank of Finland will monitor its economy regarding money supply and have a representative sit among a council with other representatives of the Euro nations. During the council the Bank of Finland will participate with other Euro nations in the preparation of a single monetary policy and the related decision making and implementation for the entire euro area. I feel that this group effort towards policy making is necessary for nations sharing a single currency and a good way to provide consistency to Europeans in the Euro zone. If one country made all the decision making for the Euro zone accommodations for other countries would obviously be unconsidered. If every country within the Euro zone made their own monetary policy it would render the Euro system useless and assign different money values to different countries for the same universal currency. For these reasons, the European Central Bank (ECB) and National Central Bank (NCB) are vital for the existence and prosperity of the Euro in Finland and elsewhere.

http://www.bof.fi/en/rahapolitiikka/index.htm
http://www.bof.fi/en/rahapolitiikka/rp_julkaisuja/index.htm

[Picture of European Central Bank]