Finland was among the most affected OECD countries during the crisis as demand for its mainly capital-goods intensive exports collapsed. The financial sector weathered the shock well, but credit contracted, reflecting both demand and supply factors. Employment has been aided by the scheme of subsidies for temporary layoffs, as well as labour hoarding. Despite supportive fiscal and monetary policies, recovery has been slow. This is likely to reflect a muted pick-up in world capital goods trade, structural rigidities in the labour market, potentially weakened competitiveness due to the strength of the euro and large wage increases prior to the downturn, and a slowdown in productivity growth. While the largely appropriate fiscal stimulus and active labour market policies are likely to have mitigated the impact of the crisis on demand, the post-crisis fiscal outlook has substantially worsened due to a largely permanent fiscal stimulus and lower potential output. Consolidation plans should be announced as soon as possible, to be implemented as the recovery takes hold. More attention to structural reforms to increase labour market flexibility and boost competitiveness and productivity would help to restore stronger growth and raise living standards over the longer term.