How Apple prompted this country's downgrade

iPhone killed our Nokia: Finnish PM
iPhone killed our Nokia: Finnish PM

Finland's prime minister suggested on Monday that Apple could be to blame for the demise of its two biggest industries, which in turn led to an economic downturn and a ratings downgrade for the Nordic country.

"We have two champions which went down," Alexander Stubb told CNBC Monday. As well as the technology firm Nokia, he explained that the paper industry in Finland had fallen on hard times.

Finland is a key production site for Europe's biggest paper producers, UPM-Kymmene and Stora Enso. The sector is also crucial for the country's economy.

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"A little bit paradoxically I guess one could say that the iPhone killed Nokia and the iPad killed the Finnish paper industry, but we'll make a comeback."

U.S. technology giant Microsoft completed the acquisition of Nokia's devices and services business back in April. The two companies had forged a partnership to produce several well-received smartphones in recent years but Nokia struggled with market share over the past few years, with the emergence of rivals like Apple and Samsung.

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Nokia was at the forefront of mobile phone manufacturing in the late 1990s and early 2000s and is seen by many as a bellwether for the Finnish economy. The forest and paper industry has also been hit in recent years, according to statistics by the Finnish Forest Research Institute (Metla). In its end of year report in 2013 it warned of a "poor situation" for paper production in the country and predicted paper production and exports to continue its contraction in 2014. Tablet computers and e-readers are seen as being in direct competition to the traditional newsprint industry.

Apple CEO Tim Cook shows off the new iPhone 6 on Sept. 9, 2014 in Cupertino, Calif.
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Stubb remained upbeat on both industries, however, although he conceded that Finland needed a few more success stories like Nokia to emerge.

"Forest is coming back in terms of bio energy and other things. And actually a new Nokia is emerged in terms of (Nokia) Networks," he said. "Usually what happens is that when you have dire times you get a lot of innovation and I think from the public sector our job is to create the platform for it."

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Ratings agency Standard & Poor's downgraded Finland's sovereign debt rating to AA+ from AAA on Friday. It cited weak development, exposure to sanctions-hit Russia and said it could experience "protracted stagnation" due to its aging population, shrinking workforce and weakening external demand.

Stubb told CNBC that his government needed to work harder and quicker and continue the structural reforms. Health care, pensions and municipal budgets are three areas which are key and have already seen some reform, according to Stubb. "We just have to keep at it," he said.