"The European Commission, the bloc's executive arm, last week ordered Helsinki to devise a credible plan to resolve the country's budget deficit, which has crossed the EU's limit of 3% of gross domestic product (GDP). The Commission said Finland's deficit was projected to reach 4.5% of GDP in 2025, while the country's debt burden was set to hit 90% of GDP next year, up by nearly half since 2019."
"Since the 2008/09 global financial crisis, Finland has struggled with fiscal discipline. The collapse of mobile phone maker Nokia, once the engine of growth, left the economy without a clear driver. That challenge was deepened in recent years by high welfare costs, a huge increase in defense spending and the economic shock of severing energy and trade ties with neighbor Russia over the war in Ukraine."
The European Commission ordered Helsinki to devise a credible plan after the budget deficit crossed the EU limit of 3% of GDP. Finland's deficit is projected at 4.5% of GDP in 2025 and government debt is set to reach 90% of GDP next year, up nearly half since 2019. The country has been placed under the EU Excessive Deficit Procedure, which could lead to fines, suspension of EU funds and stricter fiscal oversight. Long-term pressures include weak growth since 2008, the collapse of Nokia, rising welfare and defence spending, and a near-collapse of trade with Russia following the Ukraine war, which devastated border-region commerce and slashed exporters to Russia from over 2,000 firms to around 10.
Read at www.dw.com
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