The Government Programme directs the implementation of economic policy. The Government’s objective is to improve the standard of living of Finns, turn the Finnish economy on to a sustainable growth path and reverse the trend of indebtedness, which jeopardises wellbeing. The priorities of the Government’s economic policy are economic stability, employment, economic growth and safeguarding welfare services. The Government is committed to balancing general government finances in order to ensure the wellbeing of the people and the sustainable development of the economy.
Halting the trend of indebtedness requires strengthening general government finances by a total of EUR 9 billion over the course of two parliamentary terms. The Government aims to strengthen general government finances by EUR 6 billion during this parliamentary term. A longer-term goal is to balance general government finances and set the debt ratio on a downward path towards the level of the other Nordic countries.
Finland’s economic policy is also determined by EU legislation. EU legislation obliges Member States to keep public finances in balance and to avoid excessive deficits and indebtedness, so that public finances are on a sustainable basis also in the long term.
The Budgetary Framework Directive and the Fiscal Compact require that Member States put in place on a national level fiscal policy rules as well as monitoring procedures leading to compliance with EU requirements. The Budgetary Framework Directive also requires the preparation of a fiscal plan covering the whole of general government finances. The Fiscal Compact and partly also the Budgetary Framework Directive have been implemented in Finland through the Fiscal Policy Act (869/2012), which came into force at the beginning of 2013. The parts of the Budgetary Framework Directive relating to the fiscal plan have been implemented by the Government Decree on the General Government Fiscal Plan (120/2014).
However, the fiscal policy rules binding the EU Member States are being reformed. In addition, in accordance with the Government Programme, the Government intends to reform and strengthen fiscal policy rules. The strengthening of national fiscal policy and the changes in the EU’s fiscal policy framework will be reconciled in national legislation.
Senior Ministerial Adviser