Finland´s debt situation dangerous: PM

Prime Minister Petteri Orpo on Sunday said that the debt level of Finland is at the dangerous level and the government will reduce indebtedness by EUR six billion over the course of its term.

“Finland is a country with a dangerous level of debt. Roughly every eighth euro spent is financed with new debt. Increased interest expenditure, the situation in the wellbeing services counties and essential defence needs are examples of large expenditures that require borrowing,” said the Premier in his New Year speech to the nation.

He said the government will already be forced to introduce new adjustment measures to ensure adequate funding for welfare services in the spending limits discussion.

“The reduction in central government transfers to local government must be compensated within the spending limits. We have already begun to look for solutions. The range of means must be as broad as possible. The principle agreed by the Government, which aims to implement the adjustments in a way that supports employment and growth, offers a good guideline for new solutions. We have to stick to a policy of work,” the Prime Minister said.

He pointed out employment and economic growth as the permanent solution to the debt problem.

“For this reason, the adjustments should be accompanied by a growth package. We still have many solutions available that leave space for work and entrepreneurship. We can introduce structural reforms to regulation and taxation that do not directly burden general government finances,” Orpo said.

Pointing out Russia’s brutal war of aggression in Ukraine, the Finnish people and state maintained their strong support for Ukraine.

“Our decisions at the national level, such as increasing production capacity for heavy ammunition, make it possible to support Ukraine over the long term,” he said, adding that at the same time, Finland is also strengthening its own defence capability.

He also said that the violence that began with Hamas’ terrorist attack led to a humanitarian disaster in Gaza.

“We are working actively to ensure that civilians receive humanitarian aid, that the hostages are released and that the violence comes to an end. We also support efforts to resolve the Israeli-Palestinian conflict based a two-state model, both in the EU and in the UN,” he said.

The Prime Minister said that the problems at our eastern border have not gone away and the government is monitoring the situation closely and is working on solutions to stop instrumentalised migration.

“Closing the border has made everyday life more difficult for many people and businesses. However, we have to prioritise the security of Finland and its borders. We will not compromise on this,” he added.

He said that Finland joined NATO to strengthen its security after Russia attacked Ukraine in February 2022.

“In December, we signed a bilateral Defence Cooperation Agreement with the United States. The Government will submit its proposal on the agreement to Parliament this coming spring. Once it enters into force, the DCA will complement our NATO membership and further contribute to strengthening Finland’s defence,” he added.