Finance Minister Riikka Purra. Photo: Vesa Moilanen / Lehtikuva
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Finance Minister Riikka Purra has called for decisions on an additional €1 billion in public spending cuts to be finalised this year, warning that delaying action would make the process more politically difficult.
Speaking to Yle after returning from her summer break, Purra said the government must act now if it wants to make progress on stabilising public finances during the current parliamentary term.
“I would like the decisions to be made this year,” she said. “The closer we get to the next election, the harder it becomes to make these kinds of decisions.”
According to Ministry of Finance budget director Mika Niemelä, Finland still needs approximately €1 billion in fiscal adjustment to meet the targets set for the current term.
Purra has previously stated that any additional savings should not come from health and social services or core welfare benefits. Instead, she has suggested other areas such as development aid and business subsidies could offer room for cuts.
“€1 billion is a significant sum,” she said. “We cannot weaken purchasing power in this situation. The measures must be targeted where they do the least harm.”
Finland’s annual state budget stands at roughly €76 billion. This year, the government is set to borrow €13.2 billion. The country’s debt-to-GDP ratio is above 80 percent, exceeding the EU’s 60 percent reference level, although enforcement of the rule remains flexible.
The government already made limited cuts earlier this year. In April’s mid-term budget talks, ministers agreed to reduce business subsidies by just €12 million from a pool exceeding €1 billion.
Purra said she remains confident that further savings can be found in that category.
“I believe there is still something to be found from the overall business support framework,” she said.
However, she acknowledged the political challenge of reducing business aid, warning that cuts cannot be made if they lead to increased unemployment.
The issue is expected to be a key focus at the government’s budget session on 1–2 September. Some of the planned savings could be scheduled for 2027, but Purra stressed the importance of locking in the decisions this autumn.
HT
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Source: www.helsinkitimes.fi
