Finland experienced an exceptionally deep economic crisis during the first half of the 1990s. Within four years, output was reduced by more than 10% and the unemployment rate quadrupled to almost 17%. External shocks (the collapse of trade with the former Soviet Union in 1991, but also a sharp downturn in the OECD area), combined with a domestic banking crisis, led to a collapse of consumption and investment spending. Overcoming the crisis required drastic measures to improve competitiveness and to consolidate public finances -- at the same time as very costly measures were needed to revive the banking sector
