Savings|According to Purra, all adaptation measures taken must be implemented in full. There is a risk of further cuts if enough savings are not collected.
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The EU’s Economic and Financial Affairs Council opens the excessive deficit procedure for seven countries.
Finland does not fall into the observation category, even though according to the forecast, the deficit ratio of the public finances will rise above the permitted limit.
According to Finance Minister Riikka Purra, the state of the Finnish economy is still bad.
Seven An EU country is subject to the excessive deficit procedure, i.e. the “observation category”.
The Treasury minister Riikka Purra (ps) told about it at his press conference on Tuesday after the meeting of the Economic and Financial Affairs Council, i.e. Ecofin. According to Purra, the matter will be officially decided later in July.
Belgium, France, Italy, Hungary, Malta, Slovakia and Poland fall into the observation category. So there are big and influential EU countries involved. Romania is already in the observation category.
Also In Finland, there has been a fear of falling into the excessive deficit procedure. However, the European Commission decided in June that it will not take Finland there, even though it predicts that the public finance deficit will break EU debt rules this year.
The excessive deficit procedure or “fiscal monitoring category” means that the member country has to commit to the public finance adjustment program set by the Commission.
According to the EU’s debt rules, the deficit of the public finances of a member state may not exceed three percent in relation to the gross domestic product. According to the Commission’s forecast, Finland is about to break the rule this year. According to the forecast, the deficit ratio will rise to 3.4 percent this year.
According to Purra, the government is satisfied that the commission decided to open the procedure to seven countries. At the same time, the government is happy that Finland will not be placed under surveillance.
The government has so far agreed on a total of 9 billion for public finance adjustment measures. According to Purra, all agreed surgeries and other measures must be implemented “in full”. If the necessary savings still don’t come, we have to adjust even more, Purra said at the press conference.
Eurogroup at the meeting, it was outlined that fiscal policy will be tightened in the entire euro area next year. The Eurogroup is an informal body consisting of the finance ministers of the euro countries, which coordinates the economic policy of the euro countries.
Purra said, however, that he was very doubtful that all euro countries would actually implement a tightening fiscal policy.
“Believe what you see,” Purra said.
According to Purra, it is “far too early to judge” the success of the Finnish government’s economic policy.
“I have noticed that this is being discussed in the Finnish media. It would be good to think about it through counterfactuals. What if we had continued on the path of the previous government, what would the situation look like then?”
Bite your cape To the article published by HS on Tuesdayin which the situation of the Finnish economy and the success of the government were examined with the help of various indicators.
For example, the index describing the expectations of the confidence indicator, which examines the future expectations of companies, is now at a lower level than at any time since January 2018, except for the exceptional corona period. Also, for example, consumer confidence is still relatively low.
According to Purra, no time limit can be set for when the statistics should turn in a better direction so that the government can be satisfied with its adjustment policy.
“This is a long game, and we are still plowing pretty deep. The recovery of the public finances will not be completed in this term of government, but must be continued in the next term as well. The reason why it is difficult for many politicians to make difficult decisions is that issues are reviewed during one term of government.”
Bite also commented on Hungary’s EU presidency at the press conference.
The Ecofin meeting organized on Tuesday was the first during Hungary’s presidency, and Hungary presented its work program for the term there. According to Purra, helping Ukraine was shown far too little in the program.
Hungarian prime minister Viktor Orbán shivered right at the beginning of the season, when he went on his own accord to meet the Russian president Vladimir Putin. As a protest to this, Finland and Sweden have decided to boycott the ministerial meetings organized by Hungary, and send only an official-level representation to them.
“Putin’s visit has been taken very seriously here,” Purra said.
Purra said that he does not yet know if he will travel to the Ecofin meeting in Budapest in September. According to him, it depends on whether Hungary changes its actions regarding the support for Ukraine.
“That is, how do we take forward the necessary models to support Ukraine. It doesn’t look positive at the moment, but we are giving the opportunity to improve operations in this regard.”
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