State spending for next year was pegged at 54 million euros, with the government’s spending plan entailing a rise in public debt that would put the Finnish state’s indebtedness over the EU’s crisis limit of 60 percent of GDP. This would give the EU a mandate for implementing control measures to reduce the debt burden if it sees fit.
However, Danske Bank’s chief economist Pasi Kuoppamäki claims that reforms in the EU’s book keeping practices may mean Finland’s GDP is clocked at 5% higher than at present. If so, this would mean the Nordic nation would narrowly escape exceeding a public debt level sufficient to attract the ire of the EU.
On the cuts side, municipal funding will feel the pinch more than other sectors, according to the government’s plan.
Ministry refusing to bet on reforms
The ministry is well aware of the upcoming reform to the EU’s bean-counting practices. However, Mika Kuismanen, a financial adviser from the Ministry of Finance, says that it has done its calculations on the basis of existing statistical models.
“We cannot take account of the reform, because we don’t know its substance. We can’t speculate on this at all,” said Kuismanen.
The budget has already attracted criticism from the opposition for continuing to elevate Finland's public debt.
Kimmo Tiilikainen, Chair of the Centre Party Parliamentary Group, described the budget as “a tired budget from a tired government”, describing it as a “cry for help” to the opposition.