"Finland, traditionally one of the European Union's most fiscally disciplined countries, has received a wake-up call from Brussels. 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."
"The Nordic nation, whose annual economy is worth 300 billion ($349 billion), has now been formally placed under the EU's Excessive Deficit Procedure. This could lead to financial sanctions, including large fines, suspension of EU funds and stricter fiscal oversight by Brussels. Since the 2008-9 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."
Finland's budget deficit has crossed the EU 3% of GDP limit and is projected at 4.5% in 2025, with public debt set to reach about 90% of GDP next year. The country has been placed under the EU's Excessive Deficit Procedure, exposing it to potential financial sanctions, fines, suspension of EU funds and closer fiscal oversight. Prolonged low growth since 2008-9, the collapse of Nokia, rising welfare costs and a large increase in defence spending have weakened public finances. Severing energy and trade ties with Russia after the Ukraine war and a 93% fall in trade have sharply reduced exports and crossborder commerce, and the number of Finnish firms exporting to Russia fell from over 2,000 in 2019 to around 100 by the end of 2023.
Read at www.dw.com
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