Finland Needs Substantial Cuts to Balance Budget, Liikanen Says - by Kati Pohjanpalo

Finland’s government must make “substantial” spending cuts and increase taxes to bring finances onto a sustainable footing, the Bank of Finland said.

“If these steps are not taken in time, we could end up in a situation where we are forced to rapidly reduce the general government deficit at a time when economic growth is weakening,” Governor Erkki Liikanen said today in an e-mailed report. “The deteriorating economic outlook puts Finland’s public finances in a different light.”

Finland’s government will cut spending by 1.16 billion euros ($1.5 billion) and raise taxes by 1.1 billion euros in next year’s budget and plans to discuss further balancing in the first half next year, according to the government program.

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