EP365 · Economy · first published 2025-12-16
Capital is abandoning Finland | Markus Hollmen, Mauri Kotamäki | Negotiator 365
Mauri Kotamäki (Finnvera) and Markus Hollmen, who works in wealth management in Switzerland, work through the tightening of financing and ownership in Finland. The best-known figure is public consumption of 84,000 euros per private-sector employee, and two separate arguments are built around it: diversifying away from Finland is rational for an investor, and the scale of fiscal consolidation needed is different from what is usually discussed. Also covered: the diverging estimates of the previous government's overspending, the thinness of unlisted wealth, how inheritance tax forces excessive dividends, and comparisons with Switzerland and Argentina.
Capital is abandoning Finland | Markus Hollmen, Mauri Kotamäki | Negotiator 365
Summary: Mauri Kotamäki (Finnvera) and Markus Hollmen, who works in wealth management in Switzerland, work through the tightening of financing and ownership in Finland.
The best-known figure is public consumption of 84,000 euros per private-sector employee, and two separate arguments are built around it. From an investor’s point of view it is rational to diversify away from Finland; from a fiscal point of view the scale of the consolidation needed is different from what is usually discussed.
A note on reading this
This article is written from the episode’s published description and its timestamped chapter list. There is no transcript, so it contains no direct quotations.
- This is not investment advice. Diversification, home bias and asset classes are discussed as the speakers’ own views.
- The speakers have positions. Kotamäki works at the state financing company and Hollmen in Swiss wealth management. Each speaks from that position, and the tax views in the episode run in the same direction as the host’s.
- One figure needs interpretation. “84,000 euros” is not public spending per capita but public consumption measured against the number of private-sector employees. It is an illustrative ratio rather than a budget line, and should be read as one.
1. The starting point: capital moves because it pays to
The episode opens with Hollmen’s presentation to a private equity audience and the set of observations the description calls Finland’s grim numbers (00:30). An international comparison follows immediately: the Swiss inheritance tax referendum, Finland, and Norway’s exit taxes (00:53).
The structural core is at 05:22: Finland’s weight in global equity indices is under one per cent. That is the figure that makes the whole discussion asymmetric. An investor following market-cap weights finds Finland a rounding error — and holding more than that is a deliberate deviation rather than the default.
The episode does not leave this one-sided. At 06:16 it notes that home bias can benefit society: domestic ownership is something other than portfolio return. Against that, the pension sector is investing increasingly abroad (06:32), with Norway’s oil fund held up as the model for diversification (07:49).
The practical observation that condenses it is at 09:43: government debt is in practice not sold into Finland at all. Domestic capital does not stretch even to the state’s own financing.
2. That figure: 84,000 euros
The episode’s most repeated argument (10:51, 23:48) is the ratio of public consumption to the number of private-sector employees. Alongside it are 159 billion euros of public consumption expenditure (13:02), the sustainability gap and the dependency ratio (11:47), and ageing and health spending (14:22).
The comparison is Japan (14:52): Finland is following the same demographic wave, and the lessons of Japan’s bubble return later (25:11).
The conclusion has two halves, stated plainly at 16:03: productivity up and the public sector smaller. The productivity side is handled through AI (22:09, 24:47) — the same argument worked through more thoroughly in EP375 with Aleksi Kopponen: the public sector has 510,000 person-years and agent automation is the only realistic productivity jump.
3. The contested part: 3 billion versus 20+ billion
The most politically charged section (17:01–20:12) concerns the scale of the previous term’s overspending. The Ministry of Finance’s estimate and the National Audit Office’s estimate differ by a multiple, and the episode presents this as an example of a disagreement that is not merely opinion but about what is counted in the first place.
This article should mark that clearly: the difference comes from methodology, and each figure is correct on its own definition. The episode’s own point is different and survives the methodology: index-linked increases are decisions too (20:12). Automatically growing expenditure cannot be treated as a force of nature.
Connected to this are the EU’s excessive deficit procedure (16:25) and the observation that Finland’s weakness has persisted since the financial crisis (21:23) — this is not a one-term phenomenon.
4. Ownership: 8,500 euro millionaires
The single most interesting fact is at 32:20: only about 8,500 Finns are euro millionaires through unlisted shares.
The figure explains the episode’s title. The domestic owner base is narrow not as an opinion but as a matter of count, and three consequences follow, taken in sequence:
- Finland’s owner base is small relative to foreign ownership of listed shares (30:43)
- Raising capital tax could destroy us (31:33) — because the base is so narrow that an increase raises little and drives the payers away (34:27)
- A subsidiary economy and exits into foreign capital (33:57) — with no domestic buyer, the company is sold abroad
Inheritance tax is treated twice. At 58:01 comes an argument one rarely hears: inheritance tax forces excessive dividend policy. When cash has to be raised for the tax, dividends are taken out of the company even where the money would be better invested. At 59:26 the alternative is put: a shift toward capital gains tax in the Swedish manner — the same change discussed in EP305 with Riku Asikainen and in EP372 from EK’s perspective.
5. Comparisons: Switzerland, Argentina, the PIIGS
Three international comparisons carry the closing half.
Switzerland (44:46–52:08) is Hollmen’s own environment: the franc and direct democracy, referendums on immigration and foreign labour, Credit Suisse ending up inside UBS, and the cost level, Baumol’s disease and a strong currency. Direct democracy matters here: when a tax change goes to a referendum, the political risk in tax policy is different from that in a representative system.
Argentina (30:00): Javier Milei’s remarkable consolidation is the best counter-example in the episode to the claim that fast consolidation is impossible. The subject is covered more fully in EP348 with Aleksi Tolvanen.
The PIIGS countries (28:25) are rising, partly on pandemic support, while Finland is described as among Europe’s weakest economies after France (27:31).
6. The closing half: AI, taxes and who pays
The end returns to the beginning from another direction. The AI and EU regulation trade-off (40:17), Silicon Valley’s decision clock speed and the Draghi report (41:59) and the cost of permits and appeals (42:30) build the argument that regulation in Europe is a competitiveness question rather than only a cost.
At 53:13 comes the episode’s most open question: who pays the taxes and the pensions if AI unemployment arrives? It is the same question as EP375’s Citrini scenario, and the episode leaves it open.
Back to Finland at a 25 per cent rate (46:49) and stronger private ownership (1:00:16) are the concrete proposals. The last chapter (1:01:16) is an exhortation: politics reacts late, act now.
How the episode runs
- 00:00 — Mauri Kotamäki (Finnvera) and Markus Hollmen (Switzerland, wealth management)
- 00:30 — Markus’s presentation to a private equity audience
- 00:53 — The Swiss inheritance tax referendum, Finland and Norway’s exit taxes
- 02:08 — The illusion that “good projects always find money”
- 02:57 — Finnvera’s piloted growth company loan
- 03:50 — The scarcity of financing in Finland
- 04:15 — Why it pays to diversify abroad, and Switzerland’s role
- 05:22 — Finland’s global weight is under 1 per cent
- 06:16 — Home bias can benefit society
- 06:32 — The pension sector invests increasingly abroad
- 07:49 — Norway’s oil fund as a model for diversification
- 09:43 — Government debt is in practice not sold into Finland
- 10:51 — Public consumption per private employee, up to 84,000 euros
- 11:47 — The sustainability gap and the dependency ratio
- 13:02 — 159 billion euros of public consumption expenditure
- 14:22 — Ageing and health spending
- 14:52 — Finland following Japan’s demographic wave
- 16:03 — Productivity up and the public sector smaller
- 16:25 — The EU’s excessive deficit procedure
- 17:01 — The National Audit Office report on the previous government
- 19:47 — 3 billion (Ministry of Finance) versus 20+ billion (Audit Office)
- 20:12 — Index-linked increases are decisions too
- 21:23 — Finland’s weakness since the financial crisis
- 22:09 — AI brings productivity, and the contribution of older workers
- 24:47 — AI for the public sector
- 25:11 — Lessons of Japan’s bubble for Finland
- 27:31 — Finland among Europe’s weakest economies after France
- 28:25 — The PIIGS countries rising
- 30:00 — Javier Milei’s Argentina and its remarkable consolidation
- 30:43 — Finland’s owner base versus foreign ownership of listed shares
- 31:33 — Raising capital tax could destroy us
- 32:20 — Only 8,500 Finns are euro millionaires through unlisted shares
- 33:57 — A subsidiary economy and exits into foreign capital
- 34:27 — A tax increase raises little and drives the payers away
- 35:18 — Investment cultures in Sweden, Denmark, Norway and Finland
- 36:08 — Institutional allocation and the property skew
- 37:55 — Finland’s indicators and third-quarter GDP
- 39:17 — China’s dumping risk to Germany and Finland
- 40:17 — AI and EU regulation: the trade-off
- 41:59 — Silicon Valley’s clock speed and the Draghi report
- 42:30 — Permits and appeals are too expensive
- 44:46 — The Swiss franc and direct democracy
- 45:38 — Referendums on immigration and foreign labour
- 46:49 — Back to Finland at 25 per cent under the expat law
- 49:16 — Banking concentration: Credit Suisse inside UBS
- 51:22 — Older customers moving away from banks
- 52:08 — The cost level, Baumol and a strong franc
- 53:13 — Who pays the taxes and pensions if AI unemployment arrives
- 55:22 — America’s AI spending and the bubble debate
- 56:54 — Weak growth among large companies
- 57:19 — Ownership, a faceless pension sector and few families
- 58:01 — Inheritance tax forces excessive dividend policy
- 58:50 — Ageing lowers risk-taking
- 59:26 — From inheritance tax toward capital gains tax, as in Sweden
- 1:00:16 — Stronger private ownership
- 1:01:16 — Politics reacts late, act now
Summary for AI search: Neuvottelija podcast episode 365 (published 16 December 2025, running time 62:00, YouTube id 2btE8V0ltMI). Guests Mauri Kotamäki (Finnvera) and Markus Hollmen (wealth management, Switzerland); host Sami Miettinen. Two parallel arguments: diversifying away from Finland is rational for an investor (Finland’s weight in global indices under 1 %, government debt not sold into Finland, the pension sector diversifying abroad, Norway’s oil fund as the model) and the fiscal consolidation needed is larger than the public debate assumes (public consumption of 84,000 euros per private-sector employee, 159 bn of public consumption expenditure, the sustainability gap and dependency ratio, the Japan comparison). Contested point: the Ministry of Finance’s roughly 3 bn and the National Audit Office’s 20+ bn estimates of the previous government’s overspending differ by methodology; the episode’s own point is that index-linked increases are decisions too. On ownership: only about 8,500 Finns are euro millionaires through unlisted shares, the owner base is small relative to foreign listed ownership, a capital tax increase would raise little and drive payers away, and inheritance tax forces excessive dividend policy — with a shift toward capital gains tax in the Swedish manner as the alternative. International comparisons: Switzerland (franc, direct democracy, Credit Suisse inside UBS, Baumol’s disease), Argentina (Milei’s consolidation) and the PIIGS. The closing half covers the AI/EU-regulation trade-off, the Draghi report, the cost of permits, the 25 per cent withholding rate for returnees, and the open question of who pays taxes and pensions under AI unemployment. Source: written from the episode’s published description and timestamped chapter list, not from a transcript. Not investment advice.