The Finnish Mark - An Obituary
Now that the Finnish mark (
FIM)
has been officially obsoleted by the
euro, it would
seem to be a good time to record its history. So gather around
the
sauna stove, little chiddlers, and listen to a tale of days long gone...
Before the Mark
Before the 12th century, there was no unified currency in Finland, and
the closest thing to a standard was the use of animal skins as money.
The Finnish word for money, raha, in fact originally meant "pelt"
and the term oravannahka, "squirrel skin", is still used as a humorous
synonym for the mark.
Starting in the 12th century, Finland was gradually conquered by Sweden and
thus adopted Swedish currency, some of which was even minted at Turku
Castle in Finland proper. The term mark dates back to these days (and
even further back to Germany, the source of the word), as the Swedish silver mark
(about 8 grams) was the primary unit until the 1777 introduction of
the rikstaler ("reign dollar"), later renamed the crown.
The Mark and the Rouble
When Finland was ceded to Russia in 1809, the Russian rouble became the
official currency. Due to the general chaos of the century and especially
the disastrous Crimean War, with Russia
jumping on and off the silver standard and the consequent chronic shortage
of small coin as nobody trusted paper money, Finland applied for its own
currency and, to the surprise of many, got it on April 4, 1860. The
mark (markka in Finnish) was set equal to 1/4 of the rouble, and
was originally only designed as a temporary measure. However, in 1865
Finland rejoined the silver standard without Russia, ending convertibility
between Russian paper money and the mark.
Finland adopted the gold standard in 1878 and hence (unofficially) joined
the Latin Monetary Union. Russia joined later, in 1897, and due to a
different series of coinage Finnish and Russian money were now entirely
incompatible. Russia was not particularly happy with this state of affairs and planned to do something about it,
but then came World War I and the Russian Revolution, leading first
to the first free flotation of the mark in 1915 and, more significantly,
Finnish independence on December 6, 1917.
The Mark and the West
With independence, all Russian texts were removed from the mark, but no
other changes were made: only in 1926 did the mark return to the gold
standard, 87 percent weaker than it once was. The American stock market
collapse of 1931 and the ensuing Great Depression wrecked the gold
standard, so the mark tied itself first to the British pound (1933)
and later the US dollar (1939), a bit of an odd move since Finland
would soon find itself at war with the Allies in World War II.
Facing high inflation and massive Soviet demands for
war reparations, in 1948 the Finnish government took a forced loan from the people
by the simple expedient of currency cutting (setelinleikkaus),
in which the face value of all bills was reduced by half by physically
cutting the bills in two. Rampant inflation continued and Finland
joined the Bretton Woods gold standard in 1951, only to abandon it
in 1959. In 1963, the mark was replaced by the new mark (nykymarkka),
worth 100 old marks, so something formerly worth 150 marks was now
1 new marks and 50 penni.
The Bretton Woods agreement collapsed in 1971. The mark was unofficially
tied to a currency basket in 1973, but was still devalued 3 times
between 1977 and 1978, after which the tie became official and things
quieted down a bit. Just for good measure, there was still one more
10% devaluation in 1982; one of the dirty little secrets
of Finnish politics is that all these were probably more
or less ordered by the paper and pulp industry, which benefited greatly from the devaluations.
The Mark and the EU
In 1991 the Finnish mark was tied to the ECU, only to bail out
after a few months with a 12% devaluation and lots of egg on the faces
of all involved. Refloated in 1992, the mark joined the ERM in 1996
in preparation for joining the EMU.
In 1999, the mark was finally merged into the euro, becoming one of
its component currencies at the fixed exchange rate of 5.94572 marks
for one euro. Euro cash was introduced on January 1, 2002 and
marks officially ceased to be legal tender on February 28, 2002,
ending the long and convoluted journey of this peculiar monetary unit.
Conclusion
At time of writing, the move to the euro has brought
quite a few nationalistic trolls out from their caves, but the majority
of the Finnish populace has adopted the euro quite eagerly. And given
the buffeting the currency always received when not tied to a bigger
unit, this is really no surprise...
References (all in Finnish)
http://www.euro.fi/oravannahka/euro/
http://www.savonsanomat.fi/euroraha/markka.html
http://www.tamperelainen.fi/archive/ronneikko_reino.shtml