Finland’s unemployment rate has climbed to 9.9% which makes it the second-highest among EU countries trailing only Spain at 10.4% according to recent data from Eurostat. This marks a notable shift in the EU’s labor market landscape as Southern European nations once known for high joblessness are now seeing improvements while unemployment rises in the Nordic region.
Published: 31/07/25 | 15:59
In past years countries like Greece, Portugal and Italy dominated the top of the EU’s unemployment rankings. However, due to recent economic shifts Finland and Sweden have now overtaken Greece. Sweden’s unemployment currently stands at 8.3% while Greece has seen its rate drop to 7.9%.
“We’re not accustomed to seeing this kind of reversal as it’s quite a surprising development,” said Elina Pylkkänen, who is the Under-Secretary of State at Finland’s Ministry of Economic Affairs and Employment.
Finland’s jobless rate now sits significantly above the EU average and experts attribute this change to several contributing factors.
According to Statistics Finland’s latest Labour Force Survey the number of unemployed individuals rose by 27,000 in the second quarter of 2025 compared to the same period last year.
A key element behind this disparity lies in the European Union’s €750 billion Covid recovery fund. As Pylkkänen explained, much of this financial aid went to Southern European countries while Nordic nations including Finland received comparatively modest support. These grants played a vital role in reigniting growth and creating jobs in the South.
Neighboring Sweden is also struggling with unemployment and ranks among the weakest performers in the eurozone in this regard.
While Southern Europe was initially hit hard by the Covid crisis Finland has since been impacted more severely by other economic shocks. These include the war in Ukraine, sustained inflation and high interest rates implemented by the European Central Bank (ECB).
Experts suggest that ECB’s ongoing rate hikes that are intended to tame inflation have had a disproportionately negative effect on Finland. High borrowing costs have slowed down critical sectors like housing and construction intensifying economic challenges.
“European monetary policy doesn’t always align with Finland’s economic needs,” said Päivi Puonti, who is the forecasting director at the Research Institute of the Finnish Economy (ETLA).
Youth unemployment has also become a serious concern in Finland. As of June 23% of Finnish residents under the age of 25 were unemployed placing Finland fourth in the EU for youth joblessness. Only Estonia, Spain and Sweden reported higher youth unemployment rates. Data for Greece was not available.
