Finland has received good news from the European Commission as it will not face an “economic monitoring category,” as warned by Prime Minister Petteri Orpo (Kok) and Minister of Finance Riikka Purra (PS). This category refers to the EU’s excessive deficit procedure, which is being assessed this spring to determine if member states comply with the EU Treaty criteria for public finance deficit. While many countries, including Belgium, France, Italy, Hungary, Malta, Poland, and Slovakia are being proposed for this procedure, Finland has been found to comply with the deficit criterion.
The Council of member countries will decide on whether to initiate possible procedures. The EU’s Economic and Financial Affairs Council may make a decision on this matter on July 16. Starting the process may be politically challenging due to the influential populous countries involved in the decision-making process. According to the EU Treaty, public finance deficits must not exceed three percent in relation to GDP with minor and temporary deviations allowed.
Finland has done a great job in managing its public finances as its government’s public finance plan indicates that it will keep the deficit below 3.5 percent of GDP this year and decrease it to less than three percent next year according to the EU Commission’s forecast. Finance Minister Riikka Purra attributes these achievements to additional savings made during the Kehysriih meeting and measures decided in April that helped Finland avoid falling into an economic monitoring category. By making difficult decisions earlier in the year, Finland was able to meet the EU Commission’s deficit targets.
The EU Commission will conduct an evaluation next spring based on implementation data to assess Finland’s performance for the year. In addition to fiscal policy recommendations related
