The
Finnish markka ( , , currency code: FIM) was the currency of Finland
from 1860
until 28 February 2002, when it ceased to be legal tender.
The markka was replaced by the
euro (€), which
had been introduced, in cash form, on 1 January 2002.
The markka was divided into 100 pennies ( , with numbers
penniä, ), postfixed "p"). At the point of conversion, the
rate was fixed at one euro worth approximately equal to six markka,
or precisely €1 = 5.94573 mk.
History
The markka
was introduced in 1860 by the Bank of Finland
, replacing the Russian
ruble at a rate of four markka equal to one ruble. In
1865 the markka was separated from the Russian ruble and tied to
the value of
silver. After Finland gained
independence in 1917 the currency was backed by gold. The
gold standard was abolished in 1940, and the
markka suffered heavy inflation during the
war years. In 1963 the markka was replaced by the
new markka, equivalent to 100 old units.
Finland
joined the Bretton Woods Agreement
in 1948. The value of markka was pegged to
the dollar at 320 mk/$, which became 3.20 new mk/$ in 1963 and
devalued to 4.20 mk/$ in 1967. After the breakdown of the Bretton
Woods agreement in 1971, a basket of currencies became the new
reference. Occasionally,
devaluation was
used, 60% in total between 1975 and 1990, allowing the currency to
more closely follow the depreciating
US
dollar than the rising
German mark.
The paper industry, which mainly traded in US dollars, was often
blamed for demanding these devaluations to boost their exports.
Various economic controls were removed and the market was gradually
liberalized throughout the 1980s and the 1990s.
In 1991, markka was pegged to the currency basket
ECU, but the peg had to be withdrawn
after two months with a
devaluation of
12%. In 1992, Finland was hit by a severe
recession. It was caused by several factors, the
most severe being the incurring of debt, as the 1980s
economic boom was based on debt. Also, Soviet
Union had collapsed, which brought an end to the bilateral trade,
and existing trade connections were severed. The most important
source of export revenue, Western markets, were also depressed
during the same time. As a result, by some opinions years overdue,
the artificial fixed exchange rate was abandoned and the markka was
floated. Its value immediately
decreased 13% and the inflated nominal prices converged towards
German levels. Also, as a result, several entrepreneurs who had
borrowed money denominated in foreign currency suddenly faced
insurmountable debt.
The Finnish markka was added into the
ERM system in 1996 and then
became a fraction of the
euro in 1999, physical
euro money arriving later in 2002. It has been speculated that if
Finland had not joined the euro, market fluctuations such as the
tech bubble would have reflected as wild
fluctuations in the price of markka. (
Nokia,
formerly traded in markka, was in 2000 the European company with
the highest
market
capitalization.)
Names
The name "markka" was based on a medieval unit of weight. Both
"markka" and "penni" are similar to words used in Germany for that
country's former currency, based on the same roots as the
German Mark and
pfennig.
Although the word "markka" predates the currency by several
centuries, the currency was established before being named
"markka". A competition was held for its name, and some of the
other entries included "sataikko" (meaning "having a hundred
parts"), "omena" (apple) and "suomo" (from "Suomi", the Finnish
name for Finland).
With numbers, Finnish does not use plurals but
partitive singular forms:
"10
markkaa" and
"10 penniä" (the nominative is penni).
In Swedish, the singular and plural forms of mark and penni are the
same.
When the euro replaced markka,
mummonmarkka "grandma's
markka" or just
mummo has become a new slang term for the
old currency (the sometimes used “old markka” usually refers to pre
1963 markka). In
Helsinki slang,
markka was known as
huge (not the English word).
Coins
When the markka was introduced, coins were minted in copper (1, 5
and 10 penniä), silver (25 and 50 penniä, 1 and 2 markkaa) and gold
(10 and 20 markkaa). After the
First
World War, silver and gold issues were ceased and cupro-nickel
25 and 50 penniä and 1 markka coins were introduced in 1921,
followed by aluminium-bronze 5, 10 and 20 markkaa between 1928 and
1931. During the
Second World War,
copper replaced cupro-nickel in the 25 and 50 penniä and 1 markka,
followed by an issue of iron 10, 25 and 50 penniä and 1 markka.
This period also saw the issue of holed 5 and 10 penniä
coins.
All coins below 1 markka had ceased to be produced by 1948. In
1952, a new coinage was introduced, with smaller iron (later nickel
plated) 1 and 5 markka coins alongside aluminium-bronze 10, 20 and
50 markka and (from 1956) silver 100 and 200 markka denominations.
This coinage continued to be issued until the introduction of the
new markka in 1963.
The new markka coinage consisted initially of six denominations: 1
(aluminium), 5 (copper, later aluminium), 10 (aluminium-bronze,
later aluminium), 20 and 50 penniä (aluminium-bronze) and 1 markka
(silver, later cupro-nickel). From 1972, aluminium-bronze 5 markka
were also issued.
The last series of Finnish markka coins included five coins (listed
with final
Euro values):
- 10 penniä (silver-coloured) - a honeycomb on the reverse and a
lily of the valley flower on the
obverse (0.02)
- 50 penniä (silver-coloured) - haircap moss on the reverse and a
bear on the obverse (0.08)
- 1 markka (copper-coloured) - the Finnish coat of arms on the
obverse (0.17)
- 5 markkaa (copper-coloured) - a lily
pad leaf and a dragonfly on the
reverse and a Saimaa seal on the
obverse (0.84)
- 10 markkaa (two-metal coin, copper-coloured centre and
silver-coloured edge) - rowan tree branches
and berries on the reverse and a wood
grouse on the obverse (1.68)
Banknotes
This section covers the last design series of the Finnish markka,
designed in the 1980s by Finnish designer
Erik Bruun and issued in 1986.
On this final banknote series, Bank of Finland used a photograph of
Väinö Linna on the 20 markkaa note without permission from
copyright holders. This was only revealed after several million
notes were in use. The Bank paid 100,000 mk (€17,000) compensation
to rights holders.
The second-to-last banknote design series, designed by
Tapio Wirkkala, was introduced in 1955 and
revised in the reform of 1963. It was the first series to depict
actual specific persons. These included
Juho Kusti Paasikivi on the 10 markkaa
note,
K. J. Ståhlberg on the 50 markkaa,
J. V. Snellman on the 100 markkaa and
Urho Kekkonen on the 500 markkaa note
(introduced later).
Unlike Erik Bruun's series, this series did not depict any other
real-life subjects, but only abstract ornaments in addition to the
person depictions. A popular joke at the time was to cover
Paasikivi's face except for his ear and back of the head on the 10
markkaa note, ending up with something resembling a mouse, said to
be the only animal illustration in the entire series.
The still-older notes, designed by
Eliel
Saarinen, were introduced in 1922. They also depicted people,
but these were generic men and women, and did not represent any
specific individuals. The fact that these men and women were
depicted nude caused a minor controversy at the time.
Coins & banknotes that were legal tender at the time of the
markkaa's retirement can be exchanged for euros until February 28,
2012.
See also
References
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