Rewarded for failure.
Some traditional beneficiaries can still be found on the list. Nokia and its network company Nokia Solutions and Networks attracted subsidies of around 11 million euros last year – an amount which is seen from a company point of view as fairly standard.
Such cronyism and welfare in the (decreasingly) ‘private’ sector is solid proof of a full lack of confidence in the free market system. Too-Big-To-Fail is the often touted reason for direct government intervention in rescuing whatever business it may be at the moment, but it comes at the expense of other businesses who have made the right choices, and do not have the bended ear of the right politician.
In the free market system success is awarded as much as failure is punished, only the short sighted and the unconvinced look at failure of any one particular business (big or small) as ‘proof’ of failure of the entire system, and if its big enough, it needs to be rescued with public money. That’s rewarding failure at the expense of businesses which have acted smartly.
The Nokia situation is a prime example of a big business, which at one time cornered at least 25% of the phone market, acting arrogantly, making a series of bad choices over a decade ago, and as a result, lost its primacy as a phone leader. Now it sucks at the public trough.
Over the past four years the amount of support granted to big business has inflated by hundreds of millions of euros. Government support has grown by 85 percent since 2009, when it stood at 522 million euros.
Mika Maliranta, research director at the Research Institute of the Finnish Economy (ETLA), says that aid to companies is commonly thought of as a job saving measure. However, he says that sometimes government aid is just an expensive case of flogging a dead horse.
“Safeguarding employment fails quite often,” says Maliranta. “It’s supported and supported and at the end of the day the supported company still falls.”
Viking Line in consistent need of buoying up
In recent years the shipping company Viking Line has been on the receiving end of the lion’s share of subsidies – relying on some 50 million euros of public support, most of which was funneled into environmental investment aid related to the construction of the Viking-Grace.
The public assistance payout in the form of environmental aid for Viking Line more than doubled on the previous year.
The shipping industry also took the other places on the podium in terms of receiving public aid. The cash boost to struggling shipbuilder STX increased to 26 million euros while Tallink Silja’s level of support remained unchanged at 15 million euros.
The list of the Top-20 beneficiaries consists largely of various shipping companies, in addition to wind power companies, which is somewhat of a new phenomenon.
NOTE: The Greens Industry is nothing but blue smoke and mirrors, as big (crony corporatists) business hopes to cash in on public money before the bottom falls out. Also, who’s to say that we need only two major shipping lines traversing back and forth between Finland and Sweden, why not five or six major lines picking up the slack after Viking Line goes bankrupt from over regulation by Green anti-business nut-job policies?