Financial crisis or not?

During last week’s trade union talks, finance minister Jørgen Niclasen asked the unions to display community spirit because the country is in a financial crisis.

And last week, former BankNordik committee chairwoman, Stine Bosse, said the corona crisis will have far bigger economic repercussions than the 2008 credit crunch.

But Malan Johansen, the head of the national bank, disagrees.

“This is a hastened conclusion. First of all, one month of evidence can never be a firm base for an absolute conclusion,” she says.

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“How should we define a financial crisis? Looking back to the 1990s, we see the deepest financial crisis the country has ever experienced, and we are nowhere near those levels of economic despair now.”

As an example, Johansen says that the Faroese economy was moving at 100 km/h prior to the corona crisis, which is slightly above the Faroese speed limit of 80 km/h.

“The corona crisis has brought the speed down to about 70 km/h. The crucial task facing our politicians now is to ensure that we get back to 80 km/h.”

Translated by prosa.fo