October 7, 2013 / 2:07 PM / 5 years ago

Finland's Stubb worried about U.S. shutdown impact

HELSINKI (Reuters) - The global economic impact of the U.S. government shutdown, which forced the United States to postpone a trade negotiation with the European Union, was worrying, Finland’s European Affairs and Foreign Trade Minister Alexander Stubb said.

Finland's Minister of European Affairs and Foreign Trade Alexander Stubb attends the annual meeting of the World Economic Forum (WEF) in Davos January 26, 2013. REUTERS/Pascal Lauener

Washington and the EU were due to hold a second round of negotiations for the Transatlantic Trade and Investment Partnership (TTIP), but talks were postponed as an impasse in Congress over funding for the new fiscal year shut down whole swaths of America’s federal government.

“If it is prolonged it will have global implications,” Stubb said in an interview on Monday.

“To be quite honest, what the Republicans are doing in the U.S. right now, especially conservative Republicans, is irresponsible from a global perspective,” he said. “They’re trying to get a short-term political gain which might hit both the United States and the rest of the world economically.”

Policymakers have been hoping a major trade deal would help create new jobs on both sides of the Atlantic by cutting down tariffs on goods and reducing regulatory barriers to trade.

Stubb, however, sounded more positive about recovery prospects for the European economy, citing improvements and relative calm in previous crisis countries Ireland, Portugal and Spain.

“Now, are there going to be some aftershocks in this earthquake? Sure, some things can bubble up somewhere,” he said. “I’m sure something will happen, but nothing which will spin out of control. I was seriously afraid of the future of the euro a few years ago. This summer, I think, has been a relief for everyone.”


Stubb was also optimistic about Finland’s economy, despite fears of an ageing population straining public finances and a lack of fast-growing industries to replace Nokia NOK1V.HE, which is selling its handset business to Microsoft (MSFT.O).

Stubb has publicly rallied behind Nokia deal with Microsoft, saying it created a chance for the small economy to change course and seek new growth in new industries.

Clean-tech businesses, along with gaming firms such as Angry Birds developer Rovio and Super cell, which made Clash of Clans, were some of the new businesses which will lead a more diverse economy in the future, he said.

Along with its decision to buy Nokia handset division, Microsoft has also announced that it will invest more than 250 million euros ($340 million) over the next few years to build a new data center in Finland - a move Stubby said he and other government leaders fought hard for.

“Trust me, we did a hell of a lot work for the data center, and competition was fierce,” he said, adding that he did not know about Microsoft’s offer for Nokia handset division while he was lobbying for the investment.

“We had no idea the deal was taking place... But we’re happy that we snatched it.”

The recently-announced structural reforms in Finland would help ensure its public finances, one of the healthiest in the euro zone with triple-A ratings from major credit ratings agencies, would stay healthy.

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