Government endorses Stability Programme and Europe 2020 Programme
On 6 April 2011 the Government endorsed two national programmes to be handed to the European Commission. The Stability Programme update presents Finland's economic developments mainly in terms of the medium-term objective for general government finances. The national Europe 2020 Programme describes the barriers to growth, specifies the national objectives for growth and employment and specifies the required measures to achieve these goals.
In Finland, the policy outlines in these programmes are based on the result of Prime Minister Mari Kiviniemi's government negotiations, the programme of the previous government and its mid-term review, the Government's and labour market organisations' Programme for Sustainable Economic Growth and Employment, and other Government resolutions. The forecast figures presented in these two programmes are in line with those in the Economic Survey of 23 March 2011 published by the Ministry of Finance.
The new Government that takes office after the general election in April will set the economic and fiscal policies for the next government term. Finland's Stability Programme will be adjusted accordingly and the European Commission will be informed of the changes. Following next autumn's decision on spending limits, the Government will issue a more detailed Europe 2020 Programme, which will include, whenever possible, specific measures and their budgetary implications.
Stability Programme
The Stability Programme update is based on the short-term forecast published in the Ministry of Finance Economic Bulletin of March 2011.
In the course of 2010 the Finnish economy started growing. Economic growth is expected to reach 3.6 per cent in 2011. Between 2011 and 2015, annual economic growth is estimated to average around 2½ per cent. In the absence of new measures to strengthen the financial stance, general government finances are expected to remain in a slight deficit in the medium term. The projected economic growth in itself is not sufficient to stabilize public finances. Fiscal policy calls for strategies and measures that will bolster long-term sustainability in general government finances.
Europe 2020 Programme
The Europe 2020 Strategy adopted by the European Council last June aims for smart, sustainable and inclusive economic growth. The objectives covered in the Strategy include employment, research and development funding, climate issues, education matters and reducing poverty. The Member States also prepare national targets for the Europe 2020 Strategy.
Finland?s targets are to raise the employment rate of 20-64 year-olds to 78 per cent, maintain the ratio of R&D funding at a minimum of 4 per cent of GDP, raise the proportion of people with tertiary level education to 42 per cent and keep the proportion of early school leavers below 8 per cent. Another target is to reduce the number of people living at risk of poverty and social exclusion. Energy and climate targets were already agreed in the EU earlier. Finland?s national targets exceed those set at the EU level.
The programme also specifies the national prerequisites for growth and employment and describes existing barriers. Finland's aim is to safeguard long-term sustainability of public finances, reducecentralisation of the production structure, tap into labour potential to the full extent and boost competition. The programme presents the Government decisions that make it possible to achieve the national targets and help remove barriers to growth.
Stability Programme and Europe 2020 Programme foster EU economic policy coordination
The Stability Programme and the Europe 2020 Programme form an integral part of EU economic policy coordination. The coordination of economic policies will be further strengthened through amendments to subordinate legislation, which should be completed by June 2011.
The European Semester, according to which these two programmes are presented to the Commission in April, was approved earlier. With enhanced coordination of economic policies, it will be possible to better bring jointly agreed EU-level objectives into the economic policy preparations of each Member State.
The European Semester commenced with the release of the growth survey by the Commission in January 2011. The challenges of the European Union and of the Member States were discussed in European Council in March. On the basis of these discussions, agreement was reached on an overall strategy for safeguarding financial stability and sustainable economic growth. The European Council also endorsed the Euro Plus Pact for the euro area Member States, which complements and bolsters the common strategy. The measures specified in the Pact will be implemented into the national economic policies.
The next phase in the Semester is in June, when the Council will address the Commission's evaluation of the different Member States' programmes and gives any recommendations that might be necessary. The recommendations must also be taken into account when formulating national budgets.
Stability programme update for Finland2011
Europe 2020 Strategy -Finland's Draft National Programme, Spring 2011
Inquiries:
Mr Tuomas Sukselainen, Director General, Economics Department, tel. 358 9 160 33191,
Mr Arvi Suvanto (Stability Programme), tel. 358 9 160 34871 and
Ms Hannele Kerola (Europe 2020 Programme), tel. 358 9 160 33176