EU Carbon Sink Policy Lacks Cost-Effectiveness

Norwegian researchers Maarit Kallio and Elias Garvik published a study on the carbon sink policy of the EU and Norway (hereafter Europe), in which achieving forest sink targets would require an immediate and steep reduction in roundwood harvesting in Europe. This reduction could amount to 113–117 million cubic meters in the years 2030–2035 compared to a market-driven scenario, meaning that the costs of emission reductions would rise to more than €700 per tonne of carbon dioxide.

According to the researchers, this would simultaneously result in roughly two-thirds of Europe’s reduction in harvesting being offset by increased tree felling elsewhere in the world, particularly in North America, Brazil, Russia, Indonesia and Chile. In other words, restricting forest harvesting would ultimately lead to a massive transfer of income from Europe to the rest of the world without delivering significant climate benefits.

In addition, the researchers found that although harvesting restrictions would increase forest carbon sinks, their overall impact on the climate would remain limited because the climate benefits of wood products would simultaneously be lost. At the same time, economic activity in our continent would decline and significant income transfers to outside Europe would occur.

Thus, the cost per tonne of emissions saved—due to the economic burden placed on Europeans—would be many times higher than the prices used in the European Emissions Trading System.

This simply means that, in its current form, Europe’s carbon sink policy is not a cost-effective mitigation measure compared to other available options. Europe should therefore promptly abandon its current—naïve and ineffective—carbon sink policy, as it is simply irrational.

Previous thoughts on the same topic:
The EU Needs Innovations That Drive Climate Neutrality
Misleading Claims About European Forests
History of Finland VI: Age of freedom and utility

The original blogpost in Finnish:
Tuoreen tutkimuksen mukaan EU:n hiilinielupolitiikka on järjetöntä

Iran at a Crossroads: From Islamist Rule Toward Democracy?

Iranians are protesting—according to Finnish news sources (Yle, Uutissuomalainen)—because of the deterioration of the country’s economy. According to these reports, the background lies in the sanctions imposed on Iran by Western countries, but I would believe that the unrest has also been influenced by the religious leaders’ earlier saber-rattling toward Israel, which ended in humiliation.

The Islamists who lead the country have resorted to harsh measures against the demonstrators, and the situation has therefore escalated. By contrast, President Masoud Pezeshkian has urged the interior minister to listen to the protesters’ “legitimate demands.”

* * *

An interesting additional dimension to this situation has been introduced by Reza Pahlavi, the son of the shah who ruled the country before the Islamist regime. For some time now, he has been seeking to stir the Iranian people into revolution. Yesterday he published a message on social media in which he called on “the people of Iran to join in with the nationwide strikes and protests: government employees, workers in the energy and transportation sectors, truck drivers, nurses, teachers and academics, artisans and entrepreneurs, retirees and those who have lost their savings—everyone, unite and join this national movement.”

In addition, he called on “Iranians abroad—from Australia and East Asia to Europe and North America—to redouble your activities within the framework of the ‘Rise Iran’ campaign to amplify the voice of the Iranian people to the media, international institutions, foreign governments, and parliaments.” and declared that “we will win because we are united and we are many.”

As the year changes tonight, I would like, for my part, to express the hope that Iranians will finally succeed in toppling the Islamists from power and move their ancient homeland from medieval totalitarianism toward democracy—and begin a process that, over time, would lead to a weakening of religious fanaticism throughout the Middle East and Central Asia.

Previous thoughts on the same topic:
Donald J. Trump
Finnish Ex-Military Chief: U.S. Likely Halted Iran’s Nuclear Weapons Program
Will Power Change Hands in Iran?

Concern About the Future Is Growing in Russia

Russian President Vladimir Putin held his annual media spectacle, the propagandistic rambling of which was reported with varying emphasis by the Finnish media (Yle, Helsingin Sanomat). This morning, I then came across a post on social media by the Ukrainian Anton Gerashchenko, who is known for sharing his views, and whose content may have been more important than any information conveyed by Finnish news organizations.

According to him, as many as eight percent of the questions submitted for the program concerned Russia’s economic crisis, making it the third most popular topic—previously it had not even made the top ten. People wanted to know when the “bad period” of the economy would end, when price increases would stop, and why the government is raising value-added tax.

Sixteen percent of Russians also wanted to know when their standard of living would improve, and 21 percent were interested in when the war would end. These are likely rather uncomfortable questions for Putin.

* * *

In the same post, Gerashchenko also said that according to a recent opinion poll, 39 percent of Russians believe that the economic situation in their regions will worsen, compared to 33 percent a year ago, 34 percent in 2023, and 29 percent in 2022. The share of Russians who believe that life in Russia will deteriorate next year has also reached its highest level since 2022 (17%).

In other words, the consequences of the war in Ukraine are increasingly beginning to show in Russians’ everyday lives, even though—at least so far—there have been no visible (or at least serious) protests against the war. It remains to be seen at what point ordinary Russians’ concern about their own situation will lead to visible resistance against Putin’s war policy.

Or will it ever?

Previous thoughts on the same topic:
Peace in Ukraine Would Be a Risk to Putin
Why Do Russians Tolerate Broken Infrastructure?
Is This the Start of Putin’s Final Countdown?

Will Orpo’s Government Repeat Milei’s Miracle and Restore Finland’s Values?

In Argentina, President Javier Milei has been fixing the country’s economy with a firm hand. As a result, his party suffered a defeat in the provincial elections of the Buenos Aires region in September.

This morning, however, we learned that the president’s party is nevertheless set to win the parliamentary midterm elections—and by a considerable margin over the opposition. It therefore appears that, in Argentina as well, the political “climate” of the capital region differs from that of the rest of the country—just as in Finland.

For Argentinians, the outcome of the midterm election is undoubtedly a good thing, since abandoning the economic reform halfway would most likely have led their homeland into another downward spiral, from which Milei has only just managed to lift it. Now, he has the people’s mandate to complete his economic recovery program.

Although Argentina is far from Finland, its economic situation is by no means irrelevant to us. After all, we too have a government that has sought—albeit with extreme caution—to reduce state spending.

And that’s not all, because the task will also fall to the next government, if its members have even a shred of responsibility. Finland’s public finances have been chronically in debt since 2008, and nowadays the payment of interest alone consumes roughly three and a half billion euros of the state budget every year.

It remains to be seen whether the Finnish people will act like the Argentinians in the parliamentary elections to be held in 2027. In this regard, the development of Finland’s economy over the next year and a half will be a crucial question.

What matters most is that if the country’s economy and employment rate begin to grow as a result of the government’s actions, and the accumulation of debt can thereby be halted, then the current Orpo cabinet coalition will have a good chance—like Milei—to renew its mandate to lead the country. That, in turn, could put Finland’s economy back on a healthy footing.

At the same time, we could continue to repair the value base of our society toward realism. In this respect, immigration policy is a significant part of the whole.

* * *

In that light, it was interesting to read in this morning’s Helsingin Sanomat article that among the humanitarian immigrants who arrived in Finland in 2015, those who came as unaccompanied minors have fared the best. By contrast, those who arrived here as adults have unambiguously become a heavy burden on society.

The HS article suggested that the young people who came alone might have been unusually resourceful individuals, which could explain why they have succeeded in Finland better than other humanitarian refugees. That may partly explain their success, but I strongly suspect that culture also plays a role here.

More specifically, the transmission of culture from parents to children. It is clear that young people who live with their families and share the values of developing countries preserve their own cultural background more strongly than those who live alone. Therefore, they adopt Western attitudes and habits that lead to social success much less readily than those who arrived unaccompanied.

Against this background, it might make sense to make a complete U-turn in our current refugee policy and redefine Finnish humanitarian immigration—at least with regard to quota refugees—so that priority would be given to unaccompanied young people. At the same time, we could abolish family reunifications altogether, since they undoubtedly have harmful cultural consequences as well.

Previous thoughts on the same topic:
Sensible Immigration or Moral Posturing?
Javier Milei and the Great Western Opportunity
Will Orpo's Government Restore Finland to Sustainable Economic Growth?

The original blogpost in Finnish:
Toistaako Orpon hallitus Milein ihmeen ja korjaa suomalaisen arvopohjan?

When Ukraine’s Drones Fly 2,000 km, Putin’s Confidence Shakes

According to the Kyiv Post, Ukraine has carried out a drone strike more than 2,000 kilometers beyond its border. The target was an oil refinery in Tyumen, Russia, which was reportedly damaged in the attack.

Regardless of the extent of the damage, the incident is significant in that it demonstrates that Russian infrastructure is increasingly within Ukraine’s reach. Consequently, Russia’s war economy is becoming ever more vulnerable — just as Vladimir Putin turns 73.

For example, fuel shortages in many regions of Russia are already severe and are making civilian life difficult. One can only imagine how the situation will unfold in the coming months, with homes left unheated as temperatures drop to –20 or even –30 degrees Celsius.

For this reason, there now appears to be considerable potential in the air for an uprising to ignite. And this seems enough for Putin to be paying very close attention to his own security.

This is underlined by reports that even Vyacheslav Leontyev, the 87-year-old former publisher of Pravda, the leading newspaper of the Soviet Union, is said to have fallen from the window of his fifth-floor apartment in western Moscow. The man is believed to have been well informed about the secret wealth of Russia’s elite — undoubtedly including Putin himself — the existence of which is unlikely to provide much comfort to ordinary Russians facing the coming winter’s cold.

Previous thoughts on the same topic:
Why Do Russians Tolerate Broken Infrastructure?
Will Trump Finally Stand Up to Vladimir Putin?
Is This the Start of Putin’s Final Countdown?

Putin on His Knees Before Xi — and Running Out of Money

The Finnish Institute of International Affairs’ senior researcher Jussi Lassila commented on Russian dictator Vladimir Putin’s trip to China, and in doing so, he also summarized his position in world politics remarkably well. He noted that “Putin is on his knees before Xi, which suits China. Xi can present agreements to Russia that greatly benefit China, while Russia is forced to accept deals that are unfavorable to itself.”

At the same time, Lassila reassured ordinary people worried about the growing closeness between China and Russia. He pointed out that “Of course, opposition to the United States remains the common denominator here, but I don’t see any truly unified anti-Western alliance emerging between China and Russia”—and he explained, quite rightly, that “China has benefited enormously from the prevailing global order, which is why its continuity is in its interest.”

Lassila’s comments are both credible and fact-based—and therefore most likely accurate.

Another recent piece of news certainly does nothing to improve Putin’s situation: Russia’s state coffers are beginning to run dry. The liquidity of the National Wealth Fund, calculated in terms of purchasing power parity (PPP), has fallen below 155 billion euros. At the central bank, the state has net reserves of 200 billion euros (PPP). In other words, Russia’s assets are sufficient to cover the budget for only about one year—until August 2026.

In that situation, hard facts will catch up with Putin’s so-called “special operation.” After all, you cannot draw something out of nothing, and waging war is not free. It may, therefore, very well be that the fate of Tsar Nicholas II will begin to haunt the dictator who imagines himself omnipotent—sooner or later.

Previous thoughts on the same topic:
The Free World Needs America’s Leadership Now
Number of Predators is Increasing in Russia
The Price of Xi´s and Putin's Game Is Paid by Ordinary Russians

Russian Oil Giants Suffer, But the Real Reasons Remain Hidden

According to a recent report, the results of all Russia’s major oil companies collapsed in the first half of the year. A year ago, the country’s largest oil producer Rosneft reported half-year earnings of 773 billion rubles, equivalent to 85 billion euros. Now the result was only 245 billion rubles, or 27 billion euros.

Lukoil’s profit fell from last year’s 65 billion euros to 31.5 billion euros. Gazprom Neft’s earnings dropped by more than half to 16.5 billion euros. Tatneft’s and Russneft’s profits declined even more sharply, but the worst result came from Surgutneftegas, whose performance turned into a loss of 50 million euros.

The companies cite as their problems, among other things, oil overproduction resulting from OPEC countries’ policies, the overvaluation of the ruble, and Russia’s high interest rates. However, their financial statements make no mention at all of the drone strikes by Ukrainians against Russia’s oil industry or the sanctions imposed by Western countries.

It remains unclear whether this silence stems from fear of Vladimir Putin, from Russian dishonesty — or perhaps both.

Previous thoughts on the same topic:
Deep Roots of Violence and Disregard for Human Dignity in History
Russian Soldier in Finland – A Sign of Crumbling Morale?
Russia’s Economy Set to Slow, Says Bank of Finland

Military Support Is Needed to Reinforce EU Sanctions

The European Union has decided to support Ukraine in its defensive struggle against Vladimir Putin’s Russian imperialism through the following measures: 

1. The use of the Nord Stream gas pipelines will be prohibited.
2. The price cap on Russian oil will be lowered from $60 to approximately $47 per barrel.
3. Sanctions will be imposed on 105 additional vessels linked to Russia’s shadow fleet, which have been used to circumvent existing sanctions.
4. The exclusion of Russian banks from the international SWIFT payment system will be expanded into a full trade embargo.
5. An additional 22 Russian banks will be included in the trade embargo.
6. Trade bans targeting entities in third countries will continue if they are found to be assisting Russia in evading sanctions.
7. The EU proposes sanctions against the Russian Direct Investment Fund, its partners, and its investment targets.
8. The EU is proposing new export bans to Russia worth over €2.5 billion. These bans would target machinery, metals, plastics, and chemicals used in industry.
9. The export of dual-use goods to Russia will be prohibited. This includes items that could also be used for manufacturing weapons.
10. The EU has identified 22 new Russian or international companies that have supported Russia’s war economy.

This package is a good step, and hopefully it will lead to the gradual collapse of Russia’s war economy. However, what is needed right now is also more concrete military assistance for the Ukrainian army, so that the front-line situation turns in favor of the Ukrainians instead of the Russians constantly having the upper hand.

The United States – at least according to President Donald Trump – is already delivering a new military aid package to Ukraine. Therefore, now is also the right time for EU countries to do their part, so that the shift in the balance of power between the warring parties will be as significant as possible.

Previous thoughts on the same topic:
Ukraine’s Former Foreign Minister Warns Against Another 1939 
Warnings from Jussi Halla-aho and Igor Girkin About Europe's Near Future
Supercell’s Ban: The Sanction That Hit Russians the Hardest

Estonians Have Learned from Their History — and Defend Accordingly

One of the countries that regained its independence following the collapse of the Soviet Union was Estonia—the northernmost and smallest of the Baltic states. It has a population of just under 1.5 million people, of whom 68.5 percent are ethnic Estonians, 21 percent Russians, 5.4 percent Ukrainians, and the rest people of other ethnic backgrounds.

This nation has built a prosperous state, where GDP per capita has risen from $2,685.90 in 1993 to an impressive $31,170. In other words, it has grown more than elevenfold—or by 1,160 percent.

Estonia was independent from 1918 until 1940, when the Soviet Union occupied it along with the other Baltic states, based on the Molotov-Ribbentrop Pact it had signed with Nazi Germany. Incidentally, Stalin also issued ultimatums to Finland on similar grounds and eventually launched a full-scale military invasion. However, the Finns did not yield and managed to preserve their independence.

Having learned from all this, Estonians have taken national defense seriously since regaining independence. As a sign of this commitment, Estonia joined NATO as quickly as possible, and the country’s defense minister, Hanno Pevkur, has stated that Estonia allocates five percent of its gross domestic product to actual military spending.

Unlike in many other countries, high defense spending enjoys broad public support in Estonia. Among Estonian speakers, 41 percent believe defense spending should be increased to five percent of GDP, and 34 percent support a defense budget of 3.5 percent. Even among Russian speakers, 17 percent favor 3.5 percent, and five percent support increasing it to five percent.

This strong public backing allows Estonia’s defense forces to develop their capabilities further. In practice, this has included the acquisition of HIMARS air defense systems and long-range missiles capable of striking deep into Russian territory. The rationale behind the latter is the principle that if Russia attacks Estonia, the war must be taken immediately to Russian soil.

I believe that Estonia’s perspective is worth listening to not only in neighboring countries that share a border with Russia but also in Central Europe—and even along the Atlantic coast.

This is because people in those countries can only remain secure if the whole of Europe sends a clear signal that Russia has no chance of success—neither in the borderlands nor further west—thanks to overwhelming support available to frontline countries like the Baltics, should it ever be necessary.

Previous thoughts on the same topic:
Did Russia Realize the Risk Was Too Great?
Did a Finnish Fighter Jet Rush to Intercept a Russian Sukhoi Yesterday?
Shifting U.S. Foreign Policy Sparks Concerns in Estonia

Suicide and Sudden Death in Russia – What's Really Going On?

A strange epidemic seems to be spreading within Russia’s Ministry of Transport. First, it was reported that Transport Minister Roman Starovoit, who had been dismissed from his post, had committed suicide. Soon after, it was announced that another official from the same ministry, Aleksei Korneichuk, had died suddenly in the middle of a meeting.

This raises the question of whether there is something behind these events that the Putin administration does not want to reveal. And if there is, could it be related in some way to the prolonged war in Ukraine, which continues to strain Russia’s economy and population?

Unfortunately, it is highly unlikely that we will ever get an answer to this question. However, that does not mean these cases don’t strongly point to the growing troubles faced by Putin’s administration.

Previous thoughts on the same topic:
The Price of a Dictator’s Stupidity and Megalomania
Putin Faces a Heavy Price for His Hesitation
Number of Predators is Increasing in Russia

Control of Douglas fir beetles by woodborer beetles

Wildfires and bark beetles have interacted for centuries—and even millennia—to shape diverse and resilient forest ecosystems. However, the record-breaking wildfires of recent years in western North America have raised concerns that the vast areas of damaged and dead trees—essentially easily exploitable resources—might promote the growth of insect populations.

The Douglas-fir beetle, the primary mortality agent of Douglas-fir trees, often experiences population increases following wildfires. The same applies to many other phloem-feeding insects, such as various woodboring beetles, which are attracted to burned areas and colonize fire-injured trees.

In a recent study, Canadian researchers investigated the interactions between Douglas-fir beetles and woodboring beetles that exploit the phloem of fire-injured trees. More specifically, their hypothesis was that the rapid colonization of bark beetle niches by woodborers following wildfires might restrict Douglas-fir beetle population growth through interspecific competition beneath the bark.

The hypothesis was tested in three mature Douglas-fir forests in British Columbia that burned in 2017. The researchers found that both Douglas-fir beetles and woodborers preferentially colonized mature stands containing large-diameter trees with moderate fire damage.

When woodborers were absent, the Douglas-fir beetle’s reproductive rate was sufficient to cause a local population outbreak. In contrast, in stands where woodborers were abundant (more than 50% of trees infested), Douglas-fir beetles were unable to reproduce at outbreak levels.

These results indicate that competition from woodboring beetles can significantly limit Douglas-fir beetle outbreaks in fire-injured forests. From a forest management perspective, this suggests that forests should be managed in ways that support the success of economically harmless phloem-feeding insects—such as many woodboring beetle species—since their presence may help reduce the risk of bark beetle outbreaks following wildfires.

Previous thoughts on the same topic:
The EU Needs Innovations That Drive Climate Neutrality
Forests in Indonesia and Finland
Why are boreal forest fires on the rise everywhere but in Finland?

Polish Politics: A Quiet Success Story

Poland has in recent years served as an example for much of Europe in many respects. It has supported Ukraine almost unreservedly, developed its own defense capabilities through significant investments, and grown its economy at a rapid pace.

In terms of defense, Poland has, in a short time, become one of the strongest—if not the strongest—nations in Europe in terms of conventional warfare. Its army of nearly 300,000 troops has at its disposal, among other things, around 1,000 modern tanks, 600 howitzers, and nearly 50 American-built F-35 or F-16 fighter jets.

Poland’s economy, meanwhile, has grown so that its GDP per capita rose from $12,464 in 2016 to a notable $22,056 by 2023. Despite this, the average wage people earn from their work has fluctuated rather than risen in recent years.

Poland has in recent years been governed by the pro-EU, center-right Donald Tusk, while the presidency has been held by national conservative Andrzej Duda. Now, the presidential election has been won by Karol Nawrocki, who promotes a political agenda similar to Duda's, so no major changes in the country’s political direction are expected.

This is likely good news for all Europeans, even if many would have preferred that Nawrocki lose to his pro-EU opponent. In that case, the country would likely have shifted its policies to resemble those of its western neighbors—both for better and for worse.

However, the fact remains that the president does not have the power to steer Poland’s political direction; at best, he can only slow the developments driven by the government and parliament. And based on the developments of recent years—as outlined above—this arrangement has worked exceptionally well.

Previous thoughts on the same topic:
Did Russia Realize the Risk Was Too Great?
Be Ready: Russia May Launch Another "Special Operation"
Polish Minister for Foreign Affairs reminded Russians about their nightmare

Elections in Venezuela Do Not Offer Reason for Optimism

Although Western countries have long been more or less functioning democracies, this is not the case everywhere. The world’s first socialist state, the Soviet Union, did collapse under its own impossibility back in 1991, but that doesn’t mean socialism lacks support in today’s world.

An example of this unfortunate fact was seen over the weekend in Venezuela, where the socialist party received as much as 83 percent of the vote in Sunday’s parliamentary — or National Assembly — elections. In addition, a group close to the socialists gained another six percent.

The Venezuelan opposition gathered only 5.17 percent of the votes. This was influenced by the fact that many opposition leaders had urged their supporters to boycott the elections, claiming that President Nicolás Maduro had fraudulently won last year’s presidential election. This view is also shared by the international community.

It remains to be seen what Venezuela’s socialists will do with their electoral victory. However, their use of power so far does not offer much reason for optimism.

According to Wikipedia: "During the 21st century, under the leadership of socialist populist Hugo Chávez and his successor Nicolás Maduro, the Venezuelan economy has collapsed, prompting millions of citizens to flee Venezuela. GDP has fallen by 80 percent in less than a decade. The economy is characterized by corruption, food shortages, unemployment, mismanagement of the oil sector, and since 2014, hyperinflation. As of 2024, inflation has stabilized at 59.61%."

This can be compared to the time before the socialists came to power. Back then, Venezuela's economy was growing strongly, and for example, GDP per capita rose by as much as 400 percent between 2003 and 2010 — in just seven years. A similar development can hardly be expected based on the election results we’ve just seen.

Of course, Venezuela is just one of many countries that still believe in socialism, but in practice, it is a fairly representative example of its kind. And that is why it’s worth wondering why socialism still enjoys so much support around the world — not only in developing countries but also in prosperous Western nations like Finland.

Admittedly, here the socialists don’t want to call their economic thinking socialism. Instead, they "only" aim to raise taxes and transfer as many of society’s functions as possible under the responsibility of the public sector — in other words, to implement socialism without naming it for what it is.

Previous thoughts on the same topic:
Marx in the Classroom: How Ideological Education Shaped Careers and Values
Does China prove the superiority of market economy?
Lessons from Venezuela

Marx in the Classroom: How Ideological Education Shaped Careers and Values

Assistant Professors of Economics at the Stockholm School of Economics and the University of Helsinki, Jaakko Meriläinen and Matti Mitrunen, have investigated the long-term effects of an experiment conducted in Finland in 1974–75 on fifth-grade schoolchildren.

The experiment involved exposing children to pro-Soviet and Marxist interpretations of history. The educational materials used were essentially copied from Soviet textbooks and emphasized class struggle. The researchers were particularly interested in whether the pupils’ views would shift in favor of socialism.

In 1975, news of the experiment leaked to the public, prompting Finland’s then Social Democratic Minister of Education to admit that the handout used in teaching did not meet the required educational standards. As a result, the experiment was discontinued.

According to the findings of Meriläinen and Mitrunen, the children exposed to the experiment earned approximately 10 percent less over their lifetimes compared to control groups. Statistically, this effect is equivalent to ending formal education a year earlier.

They worked less and were more likely to choose socially-oriented, lower-paid professions such as teaching and nursing, and were less likely to pursue managerial positions.

However, the experiment had no measurable effect on educational attainment, cognitive abilities, or academic performance. The lower earnings were therefore not due to a lack of competence but rather to a conscious choice influenced by the propaganda they were exposed to in childhood.

As possible explanations for the reduced labor participation, the researchers suggest weakened materialistic values and a reluctance to work within a capitalist society. In other words, the findings demonstrate that propagandistic education can have a significant impact on individuals’ later economic behavior, political views, and values—even in a democratic, market-based society.

This study highlights the importance of ensuring that school education is grounded in scientific knowledge rather than political ideology. At the same time, it helps explain the paradox of why socialist societies based on planned economies have repeatedly lost the economic competition to free democratic societies—and why they have time after time produced outcomes contrary to their stated goals.

Previous thoughts on the same topic:
May Day Reflections from a President—and a Student
The Increasing Criminality Among Swedish Students Stems from Their Values
An African and an Iranian Immigrant Educated a Woke-Blinded Deputy Mayor

A New Beginning: Economic Independence in the Hands of Developing Nations

Finland’s Minister of Finance, Riikka Purra (Finns Party), has announced today that Finland will further reduce the funding allocated to development aid. This move is primarily driven by the weakness of Finland’s own economic situation.

The same may sooner or later be inevitable for several other European countries as well, if they aim to get their national debt under control. Therefore, it would be reasonable for developing countries that receive aid from EU nations to take responsibility for their own affairs.

This would mean prioritizing key issues, implementing determined economic policies, and above all, eradicating corruption. However, it remains to be seen whether they will succeed—or whether these countries will plunge into chaos as Western aid diminishes.

Previous thoughts on the same topic:
Trump’s Tariff Weapon Worked, but Will Finland’s Development Aid Strategy Succeed?
Finland Suspends Development Cooperation with Som
Responsible Development Aid and New Priorities: Finland's Development Cooperation Reforms

Will Fossil-Free Energy Turn Finland’s Economy Toward Growth?

One of the biggest international goals is to phase out fossil energy. That’s why it was interesting to note that 95 percent of Finland’s electricity production was based on fossil-free energy sources in 2024 — including nuclear, wind, hydro, and solar power, as well as renewable fuels.

Last year also marked a milestone: wind power surpassed hydropower to become the second largest source of electricity production. The only larger source is nuclear energy, which accounted for 38 percent of Finland’s electricity supply.

This development is not only excellent for climate action but also because fossil-free energy gives a competitive edge to investments that consume a lot of energy. For this reason, Finland is expected to attract a wide range of international investments in the coming years — from various data centers to fossil-free hydrogen production.

If and when these future promises are fulfilled, Finns will have reason to expect the national economy to finally embark on a path of growth. At the same time, Finland’s public finances could move toward balance — especially since the Finnish government has promised to implement reforms that support economic growth over the next two years.

Previous thoughts on the same topic:
The Green Movement is Withering – And That’s Not a Bad Thing
The difficult times for Finland's economy are coming to an end
Towards green energy despite serious drawbacks

Good luck to Chancellor Friedrich Merz!

The coalition negotiations in Germany have been concluded, and as a result, the next Chancellor of the country will be Friedrich Merz from the Christian Democrats (CDU). His government is scheduled to begin its work in the early days of May. The coalition will include the CDU, CSU, and SPD, and with this, Merz sent a message to the President of the United States, stating that "Germany is back on track."

Naturally, the government's effectiveness remains to be seen, but it will certainly not be helped by the fact that Germany's economic growth is expected to slow to almost zero in the near future. On the other hand — as we have all noticed — at least the trade war between the US and the EU, previously threatened by Donald Trump, has for now been called off by both sides.

According to Merz, the incoming government plans to significantly increase the country's defense spending and will also provide comprehensive support for Ukraine.

Domestically, the government faces pressure from the AfD, whose support has recently risen to match that of the CDU/CSU according to the latest polls. 

However, it remains to be seen how the government's policies, especially its program described as critical of immigration, will affect the popularity of different parties in the coming years.

What is clear, however, is that for the EU, the success of Merz’s government in both domestic and foreign policy would be important. Therefore, it is only fitting to wish him success in his new role.

Previous thoughts on the same topic:
What will post-migration Europe look like in the future?
Will Tomorrow’s Elections in Germany Be a Turning Point?
Afghan's Rampage in Germany Signals the End of the Value-Liberal Era in the EU

Has President Trump Lost His Grip on Reality?

The further President Donald Trump's term has progressed, the more obvious it seems that he has lost his grip on reality. The latest sign of this was his demand that Europe should retroactively pay compensation to the USA for not being able to produce goods competitive on the European market (example).

It is clear that European countries will not agree to such extortion. Nor will they stop exporting goods to the U.S. if Americans wish to buy them.

In this respect, it will be particularly interesting to see how much Trump manages to reduce the sales of European products in the United States. One would assume that price increases of even tens of percentage points—caused by tariffs—would significantly reduce their sales. However, it is also true that, in a similar way, the sale of American products to Europe will become more difficult due to countertariffs.

Lately, I have begun to suspect that Trump does not genuinely understand this. And therefore, he does not realize he should stop before irreversible damage is done to European-American trade relations.

And that is why I believe he has lost his grip on reality.

Previous thoughts on the same topic:
Economic Decline Awaits Americans as Trump Imposes Tariffs
Donald Trump’s Reliability as an Ally Has Proven to Be Questionable
The Real Problem with American Cars: Poor Market Fit

Diplomacy Without Rituals: What Awaits as Finland’s Speaker Halla-aho Visits China?

As a well-known friend of Ukraine and a person fluent in the country's language, the Speaker of the Finnish Parliament, Jussi Halla-aho (Finns Party), is traveling to China. The visit partly commemorates the 75th anniversary of the establishment of diplomatic relations between Finland and China.

However, the visit will also serve as an opportunity to discuss the bilateral political and economic relations between the two countries, as well as relations between the EU and China. Russia’s war of aggression against Ukraine and the relationship between China and the United States will undoubtedly also be topics of discussion.

Given Halla-aho’s significant role in shaping relations between Finland/the EU and Ukraine, it is likely that the issue of Ukraine will emerge as the most internationally significant topic. In this context, it is crucial to understand Halla-aho’s principled stance on all matters—that is, his refusal to engage in political rhetoric or platitudes.

Therefore, it is to be hoped that this quality is recognized and respected by the other true global superpower—China, alongside the United States. Furthermore, that his visit contributes to strengthening Ukraine’s position—and correspondingly weakening Russia’s position—in the dynamics of global power politics.

Alternatively, it is of course possible that the Chinese may not appreciate Halla-aho’s outspoken style, which could even strain relations between the host nation and Western European countries. For my part, however, I believe—and hope—that the Chinese will not fall into that trap, but rather, drawing on their millennia of experience, will be able to distinguish between empty bluster and the kind of fact-based, serious argumentation that is characteristic of Halla-aho.

Previous thoughts on the same topic:
Are We on the Brink of World War III?
Will China ally with Russia against Ukraine?
Putin´s Russia got mad about the Finnish chairman of the Parliament

Economic Decline Awaits Americans as Trump Imposes Tariffs

Economists are quite unanimous in their view that tariffs hinder economic growth and overall welfare. They also agree that free trade and the removal of trade barriers boost economic growth.

These views stem from the fact that free trade lowers the prices of goods and services for both producers and consumers. Moreover, tariffs partly translate into higher prices, which negatively affect importers, exporters, and consumers alike.

This holds true even when tariffs are intended to protect a specific industry, as they inevitably increase production input costs and trigger retaliatory tariffs. Import tariffs can also harm domestic exporters by disrupting supply chains and raising their input costs.

In the long run, an even more harmful effect of tariffs is that they reduce competition between companies. As a result, businesses operating in tariff-protected markets become inefficient and less innovative, ultimately leading to difficulties—especially if the tariff barriers are later removed.

All of this seems to be entirely unknown to U.S. President Donald Trump, who is set to announce import tariffs on "all" trade partners today. This is despite the fact that the tariffs he imposed during his first term had a negative impact on American employment, as noted by Jyrki Ali-Yrkkö, Director of the Research Institute of the Finnish Economy.

Unfortunately, potential U.S. tariffs would have equally negative effects on America's trade partners. As a result, it won’t be just Americans who "enjoy" economic decline, but almost all nations across the world.

Previous thoughts on the same topic:
The Real Problem with American Cars: Poor Market Fit
Finland and the USA: Strong Allies with Shared Interests or a Trade Dispute?
Trump’s Tariff Weapon Worked, but Will Finland’s Development Aid Strategy Succeed?