An economic report of European Union countries published in Brussels highlights the disturbing growth of Finland’s public debt.
European Commission Vice President Olli Rehn called on the government to moderate the growth of salaries and to pursue pension reform, measures he said had already been implemented in other European countries.
“Public finances show that Finland has not been able to maintain the stability programme it laid out. Finland’s (public) debt will rise to as much as 55 percent next year and soon after that in the next five years, which will be in the next term of government, it will rise to around 60 percent," Rehn said Wednesday in an interview on Yle’s Ykkösaamu radio programme.
"In the European Union, that’s the level at which measures to restrain excess debt and budget deficits will kick in,” he added.
The EU Commissioner said that this would be a disturbingly high level of debt for Finland, because government must on the one hand strengthen exports and competitiveness, while at the same time streamlining the welfare state in order to avoid rapid over-indebtedness.
“It would be better to act on the principle of ongoing preventive reform and make timely decisions, rather than when one’s back is against the wall. We have experiences of that from the early 1990s,” Rehn added, referring to a crippling recession that struck Finland at the start of the 1990s.
The economic crunch forced the government of the day to adopt drastic and painful austerity measures to stabilise the economy and restore growth.