UPDATE 2-Finland unveils 15 bln euro coronavirus aid plan as first step

* Central banker Olli Rehn praises ‘fast action’

* Agrees more will be needed (adds details, central banker comments)

HELSINKI, March 20 (Reuters) - Finland agreed a 15 billion euros ($16.2 billion) aid package on Friday, ranging from loan guarantees to labour market support, but the government said more was needed to curb the economic impact of the coronavirus and it was working on extra measures.

Earlier this week, the Bank of Finland said it expected the Finnish economy to shrink between 1.5% and 4% this year.

That could be conservative as the length of the coronavirus crisis is extremely uncertain.

The most significant amount of financial aid agreed on Friday was an extra 10 billion euros to guarantee companies’ loans through Finnvera, the state’s financing and export credit company.

“The idea is that Finnvera will guarantee and the banks will distribute,” Economics Minister Mika Lintila told a news conference, adding more was needed. “This is not enough, we are already working on an additional package.”

The government compensation to Finnvera for its credit and liability losses will increase to 80% from 50% to enable riskier lending, the government said.

It gave its innovation fund Business Finland an additional 150 million euros to ease the impact on small and middle-sized companies, including those in the travel and cultural sectors that have taken an immediate blow with cash flows down to zero.

The government also agreed on Friday on labour market reforms. They include allowing immediate layoffs to try to avoid bankruptcies. Those made redundant will receive social welfare.

Finland’s exposure to the new coronavirus is unclear after the country began restricting testing last week. On Thursday, it said it had around 400 confirmed cases, but the real number could be much higher.

The length of time the measures to deal with the outbreak will have to be imposed is also an unknown and they are subject to change.

On Friday the government rowed back on a decision to close schools except for the children of parents in essential professions and said all children under 10-years-old could return to school if it was necessary for their families.

“The length of this crisis depends on how quickly the coronavirus pandemic can be contained so that it doesn’t spread uncontrollably,” Finland’s central banker Olli Rehn told a news conference.

He called on euro area governments to agree on a coordinated European fiscal response, which he said could particularly benefit Finland, as “a small and remote country”.

He gave his blessing to the Finnish government’s “fast action” and echoed the government’s view more would be needed.

“It is typical for all crises that decisions must be taken rapidly, but at the same time bearing in mind that they are not the final decisions,” Rehn said.

$1 = 0.9287 euros Reporting by Tarmo Virki and Anne Kauranen; Editing by Toby Chopra and Barbara Lewis