Finland considers more austerity

Helsinki: Finland is committed to stopping public debt rising by its 2015 target despite deteriorating growth and may announce new austerity measures next year, Finance Minister Jutta Urpilainen said on Thursday.

The ministry’s economists on Wednesday slashed the outlook for the economy and forecast its general government gross debt-to-GDP ratio increasing to 59.9 per cent in 2015 from 53.0 in 2012, raising doubts about Finland’s reputation as one of the euro zone healthiest economies.

“The government still wants to turn around the debt growth.

Whether that requires additional (austerity) measures will be evaluated next spring when we have more information on GDP development,” Urpilainen told Reuters in an email.

Keen to preserve Finland’s triple-A credit rating, the six-party government — now half way of its four-year term — has already announced austerity measures that total €5.5 billion ($7.4 billion) in net savings.

While Finland has been seen as a safe haven from the euro zone debt crisis, the economy slipped into recession earlier this year as its exports have been hit by slower demand from elsewhere in Europe.

Urpilainen said she was certain the government will also be launching new structural reforms to boost public sector productivity, lengthen working-years of labour and lifting employment.

She added the company could sell state-owned businesses, while it also could invest in new ones.