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Finland is a parliamentary republic with a Prime Minister and a President. The central government is based in Helsinki. The country is divided into 19 regions and 70 sub-regions.

Finland is among Europe’s wealthiest economies. It is a member of the European Union and of the Eurozone. The most important sector of Finland’s economy is industry. Intra-EU trade accounts for more than 50% of Finland’s exports (mostly Germany, Sweden and the Netherlands) and more than 70% of its imports.

Competitiveness has improved over the past five years, with unit labour costs decreasing between 2015 and 2018 and since then rising at the same pace as those in the Eurozone as a whole. This improvement in competitiveness has been largely due to the implementation of structural reforms by the Finnish government since 2016. These have included the scrapping of regulation that hinder competition and the agreement of a “Competitiveness Pact” between employers and unions to hold wage growth down.

Finland is one of the countries that came out the best from the Covid-19 pandemic, with one of the lowest infection rates in Europe. Nevertheless like in many developed economies confronted to this crisis, the surge in government spending associated with fall in receipts badly hurt public finances in Finland. Still, at 71% of GDP in 2021 (Commission estimates), the public debt to GDP ratio is one the lowest in the OECD and the country risk profile still one of the best.