Finnish border town is feeling Russian pinch

Besides its stunning lakeside setting, a striking sight for visitors to the Finnish town of Lappeenranta is the road sign: 220km to Helsinki, 200km to St Petersburg.

Finland shares a 1,300km border with Russia and so it's not surprising that the EU standoff with Moscow is proving a major factor in Sunday's Finnish election. And in Lappeenranta, just 30km from the Russian border, things are particularly chilly.

Surrounded by strip malls and packed with shopping centres, Lappeenranta has enough retail space to supply the needs of the town’s 70,000 citizens twice over. Besides sprawling papermills outside town, the biggest local business is catering to the busloads of Russians who stream over the border daily.

Or, more accurately, streamed: Russians spent €217 million on food alone in Lappeenranta last year, but that was down 16 per cent in a year as Ukraine tensions and the falling oil price pushed down the value of the rouble against the euro. While cross-border tourism has slumped, those who still come are mostly day-trippers, spending about €150 per head – €100 less each than two years ago. Where once they bought fur coats and Italian shoes, those who still come are buying groceries.

The EU-Russia standoff is, for towns like Lappeenranta, a bread-and-butter issue. The Disas supermarket was built four years ago as a Russian seafood temple, with a staggering fish counter and 40 varieties of black caviar and orange roe in fridges. All that’s lacking is customers.

Near-empty carparks

A year ago, even on a weekday morning, there would have been 50 Russian registration plates in the carpark, say locals. Today there are just six.

In the nearby Galleria shopping centre, signs promise 70 per cent discounts. In a foreign exchange booth, the rouble is worth 60 to the euro, down from last year’s peak of twice that, but business is slow to recover and there’s still a sign in the window in Cyrillic offering Russian customers gold coins.

“The Russians are slowly coming back since February but checking and comparing prices more carefully than before,” says Vesa Leppiniemi, manager of the Moda fashion store.

Sitting in his office, local chamber of commerce head Mika Peltonen takes the long view. Their common history – and regular Russian economic crises – have taught local businesses to be patient and pragmatic in their dealings with their big neighbour. “Trust at business level with the Russians even if not at political level,” says Peltonen. “We’ve seen crises before and common sense always prevails in the end.”

A survey of businesses across Finland showed 71 per cent already feel a direct or indirect cost of sanctions, with the dairy industry particularly hard hit. Yet almost one in two businesses (46 per cent) accept sanctions while a third say they support even tougher measures.

Of 100 businesses surveyed in Lappeenranta, 85 per cent say they feel the negative effect yet seem resigned to take the hit – for now, at least.

Outside town, at Lappeenranta University of Technology (LUT), long-time Russia watcher Prof Juhu Väätänen is more concerned. An extended EU clampdown will, he fears, only push Russia further into its shell just when it needs European investment and technology.

Väätänen, head of the LUT’s international business programme, says that although political and economic ties have grown more strained with Russia, cross-border links with his institution are booming as Russian universities come under pressure to get into the top international rankings.

"While other channels are closing," he says, "I see education as a place to keep the channels open." One of his doctoral students, Ekaterina Albats, raised in Moscow, agrees. Lappeenrate has the most ties with Russia of any university in Europe and offers, she says, a "neutral space to push education, science and research" with Russia.

Back in town, enthusiasm for Russia is a classic border mix of mercantile apathy. “I don’t like the Russians to be honest. They’re rude and they smell of cigarettes,” said one cafe worker, Anni. “I could do without them, personally speaking, but the town cannot.”

Politicians have reacted to the global standoff with a local spin. One candidate wants to ban Russians buying up properties around Lake Saimaa, the fourth-largest in Europe. Two other candidates play the security card without mentioning Russia directly: one promises on posters “a safe Finland, even in the future” while a rival vows: “I will protect you.”

Ask around town, however, and many say the Finns most worried about Russia are the ones furthest away. Even in this precarious part of neutral Finland, support for Nato membership – at 30 per cent – is only marginally higher than elsewhere.

Clothes vs food

As the rouble slowly recovers, Lappeenranta is welcoming back Russian customers – but to its supermarkets more than its clothes stores. At the sprawling Prisma superstore, many Russian customers are store and kiosk owners who visit twice a week for contraband to sell back home.

Russians say they cannot do without favoured Finnish products that are usually better quality and sometimes even cheaper than at home.

At one checkout, a Russian man is packing 10 massive hunks of cheese and 20 packets of coffee. Whether it’s for commercial or personal use, he’s not saying. “I think we should get rid of the sanctions,” he says. Then, sealing up his bulging shopping bags of food with customs tape, he announces defiantly: “I think it’s worse for Europe than for us.”