SALO (Reuters) - Prime Minister Jyrki Katainen said the Finnish government will not consider purchasing Nokia shares, quashing hopes the government would help support the company’s plunging stock.
“This is not our business. We are developing Finland into a country where companies can do well, but this is not the way of support along which the government will go,” Katainen said on a visit to Salo in southern Finland where Nokia plans to close a cellphone manufacturing plant.
There has been debate in Finland over whether the government should invest in Nokia, a central plank of Finland’s economy, to bolster its finances and help prevent a foreign takeover that could see its operations moved abroad.
The government already holds shares in various companies considered crucial for its national interests, including forest and chemical companies, and is a majority shareholder in struggling airline Finnair and energy company Fortum.
Finland is one of the few remaining triple-A rated countries in the euro zone, but its exports have been declining with Nokia, as well as traditional industries like paper and pulp, struggling to compete with cheaper rivals.
Finland’s current account slipped into the red last year, and the central bank expects a deficit to continue through at least 2014.
At its peak, Nokia accounted for around 4 percent of Finnish GDP and supported a wide range of companies as suppliers. Today it contributes less than 1 percent, according to analysts.
Nokia’s shares, which have fallen more than 50 percent since the start of the year, closed 1.5 percent lower on Wednesday.
The company has lost about three-quarters of its market value, or roughly 20 billion euros ($25.40 billion) in absolute terms, since turnaround Chief Executive Stephen Elop took the helm in September 2010.
($1 = 0.7873 euros)
Reporting By Eero Vassinen; Editing by Jon Loades-Carter