The markka ( fi, markka; sv, mark; sign: Mk; ISO code: FIM, typically known outside Finland as the Finnish mark) was the

currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general ...

Finland Finland ( fi, Suomi ; sv, Finland ), officially the Republic of Finland (; ), is a Nordic country in Northern Europe. It shares land borders with Sweden to the northwest, Norway to the north, and Russia to the east, with the Gulf of Bot ...

from 1860 until 28 February 2002, when it ceased to be legal tender. The mark was divided into 100 pennies ( fi, penni; sv, penni), abbreviated as "p". At the point of conversion, the rate was fixed at €1 = Mk 5.94573. The mark was replaced by the

euro The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...

(€), which had been introduced, in cash form, on 1 January 2002. This was after a transitional period of three years, when the euro was the official currency but only existed as "book money" outside of the

monetary base In economics, the monetary base (also base money, money base, high-powered money, reserve money, outside money, central bank money or, in the UK, narrow money) in a country is the total amount of money created by the central bank. This include ...

. The dual circulation period, when both the Finnish mark and the euro had legal tender status, ended on 28 February 2002.

Etymology

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 etymological roots as the Deutsche Mark and

pfennig The 'pfennig' (; . 'pfennigs' or ; symbol pf or ₰) or penny is a former German coin or note, which was the official currency from the 9th century until the introduction of the euro in 2002. While a valuable coin during the Middle Ages, ...

. 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 numbered amounts of marks, the Finnish language 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.

Nicknames

When the euro replaced the mark, ''mummonmarkka'' (, sometimes shortened to just ''mummo'') became a new colloquial term for the old currency. The sometimes used "old mark" can be misleading, since it can also be used to refer to the pre-1963 mark. In Helsinki slang, the sum of a hundred marks was traditionally called a ''huge'' u.ge(from Swedish ''hundra'' for "hundred"). After the 1963 reform, this name was used for one new mark.

History

The mark was introduced in 1860 by the

Bank of Finland The Bank of Finland ( fi, Suomen Pankki, sv, Finlands Bank) is the central bank of Finland. It views itself as the fourth oldest surviving central bank in the world, after Sweden's Riksbank, the Bank of England, and the Bank of France. History ...

, replacing the rouble at a rate of four marks to one rouble. Senator Fabian Langenskiöld is called "father of the mark". In 1865, the mark was separated from the Russian rouble and tied to the value of

silver Silver is a chemical element with the symbol Ag (from the Latin ', derived from the Proto-Indo-European ''h₂erǵ'': "shiny" or "white") and atomic number 47. A soft, white, lustrous transition metal, it exhibits the highest electrical ...

. From 1878 to 1915, Finland adopted the gold standard of the Latin Monetary Union.Carl-Ludwig Holtfrerich, Jaime Reis, and Gianne Toniolo, The Emergence of Modern Central Banking from 1918 to the Present, table 4.2 Before the mark, both the Swedish riksdaler and rouble were used side-by-side for a time. Up until

World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was List of wars and anthropogenic disasters by death toll, one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, ...

, the value of the mark fluctuated within +23%/−16% of its initial value, but with no trend. The mark suffered heavy inflation (91%) during 1914–18. Gaining independence in 1917, Finland returned to the gold standard from 1926 to 1931. Prices remained stable until 1940. but the mark suffered heavy inflation (17% annually on average) during

World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the World War II by country, vast majority of the world's countries—including all of the great power ...

and again in 1956–57 (11%). In 1963, in order to reset the inflation, the mark was replaced by a ''new mark'', equivalent to 100 old marks. Finland joined the Bretton Woods Agreement in 1948. The value of the mark was pegged to the dollar at Mk 320 = US$1, which became New Mk 3.20 = US$1 in 1963 and devalued to Mk 4.20 = US$1 in 1967. After the breakdown of the Bretton Woods agreement in 1971, a basket of currencies became the new reference. Inflation was high (over 5%) during 1971–85. Occasionally, devaluation was used, 60% in total between 1975 and 1990, allowing the currency to more closely follow the depreciating

US dollar The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the officia ...

than the rising

German mark The Deutsche Mark (; English: ''German mark''), abbreviated "DM" or "D-Mark" (), was the official currency of West Germany from 1948 until 1990 and later the unified Germany from 1990 until the adoption of the euro in 2002. In English, it was ...

. 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. The monetary policy called "strong mark policy" (''vahvan markan politiikka'') was a characteristic feature of the 1980s and early 1990s. The main architect of this policy was President

Mauno Koivisto Mauno Henrik Koivisto (; 25 November 1923 – 12 May 2017) was a Finnish politician who served as the ninth president of Finland from 1982 to 1994. He also served as the country's prime minister twice, from 1968 to 1970 and again from 1979 to ...

, who opposed floating the currency and devaluations. As a result, the nominal value of the mark was extremely high, and in the year 1990, Finland was nominally the most expensive country in the world according to

OECD The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate ...

's Purchasing Power Parities report. Koivisto's policy was maintained only briefly after Esko Aho was elected Prime Minister. In 1991, the mark 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 In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various ...

, the early 1990s depression in Finland. It was caused by several factors, the most severe being the incurring of debt, as the 1980s

economic boom An economic expansion is an increase in the level of economic activity, and of the goods and services available. It is a period of economic growth as measured by a rise in real GDP. The explanation of fluctuations in aggregate economic activi ...

was based on debt. Also, the

Soviet Union The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen nationa ...

had collapsed, which brought an end to bilateral trade, and existing trade connections were severed. The most important source of export revenue, Western markets, were also depressed during the same time, in part due to the war in Kuwait. As a result, by some opinions years overdue, the artificial fixed exchange rate was abandoned and the mark was floated. Its value immediately decreased 13% and the inflated nominal prices converged towards German levels. In total, the value of the mark had decreased 40% as a result of the recession. Also, as a result, several entrepreneurs who had borrowed money denominated in foreign currency suddenly faced insurmountable debt. Inflation was low during the mark's independent existence as a floating currency (1992–1999): 1.3% annually on average. The markka was added into the ERM system in 1996 and then became a fraction of the

in 1999, with physical euro money arriving later in 2002. It has been speculated that if Finland had not joined the euro, market fluctuations such as the

dot-com bubble The dot-com bubble (dot-com boom, tech bubble, or the Internet bubble) was a stock market bubble in the late 1990s, a period of massive growth in the use and adoption of the Internet. Between 1995 and its peak in March 2000, the Nasdaq Comp ...

would have reflected as wild fluctuations in the price of the mark.

Nokia Nokia Corporation (natively Nokia Oyj, referred to as Nokia) is a Finnish multinational telecommunications, information technology, and consumer electronics corporation, established in 1865. Nokia's main headquarters are in Espoo, Finland, i ...

, formerly traded in mark, was in 2000 the European company with the highest market capitalization.

Coins

First mark

When the mark was introduced, coins were minted in copper (1, 5 and 10 penniä), silver (25p and 50p, Mk 1 and Mk 2) and gold (Mk 10 and Mk 20). After the

First World War World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was List of wars and anthropogenic disasters by death toll, one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, ...

, silver and gold issues were ceased and cupro-nickel 25p and 50p and Mk 1 coins were introduced in 1921, followed by aluminium-bronze Mk 5, Mk 10 and Mk 20 between 1928 and 1931. During the

Second World War World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposi ...

, copper replaced cupro-nickel in the 25p and 50p and Mk 1, followed by an issue of iron 10p, 25p and 50p and Mk 1. This period also saw the issue of holed 5p and 10p 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) Mk 1 and Mk 5 coins alongside aluminium-bronze Mk 10, Mk 20 and Mk 50 coins and (from 1956) silver Mk 100 and Mk 200 denominations. This coinage continued to be issued until the introduction of the new mark in 1963.

Second mark

The old coins and banknotes were exchanged to new ones at 100:1 rate.

1st series

The new mark coinage consisted initially of six denominations: 1 (bronze, later aluminium), 5 (bronze, later aluminium), 10 (aluminium-bronze, later aluminium), 20 and 50 penniä (aluminium-bronze) and 1 mark (silver, later cupro-nickel). The design of new coins (1963) was identical to those of the last issue of the 1st markka but with new denominations (i.e. 1 penni instead of 1 markka, etc.). From 1972, aluminium-bronze Mk 5 were also issued.

2nd series

The last series of Finnish markka coins included five coins (listed with final

values, rounded to the nearest cent): * 10p (silver-coloured) – a honeycomb on the reverse and a lily of the valley flower on the obverse = €0.02 * 50p (silver-coloured) –

haircap moss ''Polytrichum'' is a genus of mosses — commonly called haircap moss or hair moss — which contains approximately 70 species that cover a cosmopolitan distribution. The genus ''Polytrichum'' has a number of closely related sporophytic characte ...

on the reverse and a bear on the obverse = €0.08 * Mk 1 (copper-coloured) – the Finnish coat of arms on the reverse = €0.17 * Mk 5 (copper-coloured) – a

lily pad Nymphaeaceae () is a family of flowering plants, commonly called water lilies. They live as rhizomatous aquatic herbs in temperate and tropical climates around the world. The family contains nine genera with about 70 known species. Water li ...

leaf and a

dragonfly A dragonfly is a flying insect belonging to the infraorder Anisoptera below the order Odonata. About 3,000 extant species of true dragonfly are known. Most are tropical, with fewer species in temperate regions. Loss of wetland habitat thre ...

on the reverse and a Saimaa seal on the obverse = €0.84 * Mk 10 (two-metal coin, copper-coloured centre and silver-coloured edge) – rowan tree branches and berries on the reverse and a

wood grouse The western capercaillie (''Tetrao urogallus''), also known as the Eurasian capercaillie, wood grouse, heather cock, cock-of-the-woods, or simply capercaillie , is a heavy member of the grouse family and the largest of all extant grouse species. ...

on the obverse = €1.68

Banknotes

This section covers the last design series of the Finnish mark, designed in the 1980s by Finnish designer Erik Bruun and issued in 1986. In this final banknote series, Bank of Finland used a photograph of Väinö Linna on the Mk 20 note without permission from copyright holders. This was only revealed after several million notes were in use. The Bank paid Mk 100,000 (€17,000) compensation to the 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 rather than allegorical figures. These included Juho Kusti Paasikivi on the Mk 10, K. J. Ståhlberg on the Mk 50,

J. V. Snellman Johan Vilhelm Snellman (; 12 May 1806 – 4 July 1881) was an influential Fennoman philosopher and Finnish statesman, ennobled in 1866. He was one of the most important 'awakeners' or promoters of Finnish nationalism, alongside Elias Lönnrot an ...

on the Mk 100 and, controversially, Urho Kekkonen on the Mk 500, added in 1975 to commemorate the president's 75th birthday. Unlike Erik Bruun's series, this series did not depict any other real-life subjects, but only abstract ornaments in addition to the depictions of people. A popular joke at the time was to cover Paasikivi's face except for his ear and back of the head on the Mk 10 note, ending up with something resembling a mouse, said to be the only animal illustration in the entire series. 5000 markan setelit 1940

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.

Euro banknotes

By the end of 2001, Finland was a relatively cashless society. Most transactions were paid either using the Mk 100 banknote or by debit card. There were 4 million banknotes apiece of the Mk 500 and Mk 1,000 denomination banknotes for a country with a population of over 5 million people. There were about 19 banknotes per individual of the smaller denomination, adding up to €241 per inhabitant. For the introduction of the euro, ECB produced €8,020 million in banknotes before the changeover. During the first weeks of 2002, Finland's replacement of previous national banknotes with euro banknotes was among the fastest in the euro area. Of the cash payments, three-fourths were paid in euro already at the end of the first changeover week. Coins and banknotes that were legal tender at the time of the markka's retirement could be exchanged for euros until 29 February 2012. Today, the only value that markka coins and banknotes have is their value as collectibles.

References

External links

Overview of markka from the BBC

at the Bank of Finland
Main outlines of Finnish history-thisisFINLAND

{{DEFAULTSORT:Finnish Markka

Markka The markka ( fi, markka; sv, mark; sign: Mk; ISO code: FIM, typically known outside Finland as the Finnish mark) was the currency of Finland from 1860 until 28 February 2002, when it ceased to be legal tender. The mark was divided into 100 p ...

Modern obsolete currencies Currencies replaced by the euro Currencies of Europe

Currencies introduced in 1860