The Government approved the Stability and Europe 2020 programmes
On 18 April 2013, the Government approved two national programmes, which will be delivered to the EU Commission. The Stability Programme describes the medium-term economic development of Finland’s economy, particularly its public finances. The Europe 2020 National Programme describes the government measures by which the national targets set on the basis of the Europe 2020 Strategy will be achieved. The programme responds to the structural reform recommendations given for Finland by the European Council.
The programmes are based on decisions made by the Government, including the decisions agreed in the March 2013 spending limits discussion. The forecast figures presented in the programmes are consistent with the forecast figures of the Ministry of Finance’s Economic Survey published on 27 March 2013.
Stability Programme
Stability and convergence programmes provided under the Stability and Growth Pact form the basis for the multilateral monitoring of the EU’s fiscal policy and the coordination of economic policy. The Stability Programme presents Finland’s economic policy objectives and premises, particularly in terms of fiscal policy, and projects their implementation up to 2017.
Finland’s GDP is projected to grow by 0.4% in 2013. In the medium term, GDP growth is projected to remain subdued.
Finland’s general government finances, which had long been in surplus, deteriorated sharply into deficit as a consequence of the recession in 2009. In 2012 the general government deficit was 1.9% of GDP. In the medium term, the general government financial position will strengthen, however, and the general government debt to GDP ratio will begin to fall.
At the same time, population ageing will adversely affect conditions for economic growth, increase central government age-related expenditure and inevitably weaken the general government financial position. The long-term sustainability gap in public finances is estimated to be 4.2% of GDP.
The Stability Programme sets a medium-term objective of -0.5 per cent of GDP for the general government structural balance. The objective is in line with both the Stability and Growth Pact and the national legislation required by the Fiscal Compact between Member States, which came into force at the beginning of 2013. The general government structural balance will remain stronger than the medium-term objective during the programme period.
Finlands stability programme 2013, 9c/2013
Europe 2020 Programme
The national targets set by Finland for 2020 exceed the headline targets agreed at the EU level. Finland aims to raise the employment rate of 20–64 year-olds to 78%. The target level of research and development expenditure is 4% of GDP. With respect to those who have completed tertiary-level education, the goal is that 42% of 30–34 year-olds will have a qualification. The aim is to reduce the proportion of early school leavers to 8%. A further objective is to reduce the number of people living at risk of poverty and social exclusion by 150,000. The energy and climate targets set by the EU will be achieved.
In 2012 the European Council gave Finland five recommendations, which should be taken in account in national decision-making. In 2012 and 2013 Finland was urged to ensure the long-term sustainability of public finances, improve the productivity of public services, lower unemployment and raise the statutory retirement age, increase competition and diversify the business structure, and align wage and productivity developments.
Europe 2020 Strategy – Finland’s National Programme, Spring 2013, 10c/2013
More effective coordination of economic policy in the EU
The European Semester was launched at the beginning of 2011. The goal of the annual Semester is to enhance coordination of economic policy in the EU. Member States’ economic and employment policies will be steered and assessed more effectively and shortcomings will be addressed, if necessary. The Semester takes into account EU regulations aimed at strengthening economic governance, which were approved at the end of 2011.
The European Semester is initiated by a Growth Survey released by the Commission. Based on the survey, the European Council specifies in March the most important economic and employment policy challenges, and gives general guidance to Member States. In April, the Member States report to the EU in the form of a Stability Programme and a Europe 2020 National Programme. These programmes take into account the guidance given by the European Council. In late May/early June, the Commission gives country-specific recommendations, which the Council approves in June. If a Member State deviates from that which is agreed, the EU may, if necessary, intervene in national decision-making.
Inquiries:
The Stability Programme: Mr Mikko Spolander, Financial Counsellor, tel. 358 2955 30006
The Europe 2020 NationalProgramme: Ms Hannele Kerola, Ministerial Adviser, tel. 358 2955 30199