Feb 25 • 20:21 UTC 🇫🇮 Finland Yle Uutiset

Expert: The next government faces a difficult task - billion-euro adjustments must be made as genuine savings

Professor Roope Uusitalo states that Finland's next government will face significant budgetary challenges requiring 8-11 billion euros in genuine savings or revenue increases.

According to Roope Uusitalo, a professor of economics at the University of Helsinki, the upcoming Finnish government will confront considerable challenges regarding public finances as it is expected to adjust the budget by 8 to 11 billion euros over its term. This figure is derived from a report by a bipartisan debt brake working group formed by parliamentary parties, which indicates that the easier measures to address the fiscal needs have already been exhausted, leaving the next government with tough choices ahead.

Uusitalo highlights that the current government has made some notable savings decisions; however, these have often been counteracted by additional investments, such as tax cuts that leverage potential employment impacts. To meet the upcoming fiscal adjustments, it is essential for the next government to implement genuine savings or tax measures devoid of compensatory offsets, adhering to the financial policy rules mandated by the EU's regulations on deficits. This change marks a shift from previous strategies where savings were often tied to investments that could lead to further expenditure.

As the discussions revolve around how to address these substantial fiscal demands, it is clear that the next administration will need to navigate complex economic landscapes while adhering to strict financial guidelines. The implications of their decisions could potentially reshape the economic stability and future financial planning of Finland, particularly in light of EU fiscal requirements that demand a stringent approach to deficit management.

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