Speaking in a budget debate in parliament on Monday, Katainen warned it was unwise to assume Finland could always obtain cheap loans. Last week Standard and Poors once again ranked Finland as one of the most financially reliable nations by renewing its grade 3A status. However, the classification report including a warning that Finland’s rating could drop if public sector expenditure was not kept in check.
Katainen warned a fall in Finland’s credit rating would mean an increase in state loan interest rates leading to higher housing and business interest rates.
The Finance Minister also responded to opposition criticism of government policies on taxation and employment. He said it was right to expect higher income groups to participate in measures to alleviate the current finance crisis. However, he ruled out higher income taxes saying this would hardly help balance the state economy.
Opposition parties and several Centre Party parliamentarians have called for a revision of tax levels for higher income groups.