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Thu, 13 Feb, 2014 12:34:59 AM EUR 3 billion should be adjusted in several years: Urpilainen OECD urges for more efforts in structural reform FTimes-STT-Xinhua Report, February 13  OECD Secretary-General Angel Gurria speaking in the programme of presentation the Economic Report of Finland in Helsinki on Wednesday. Photo – Str / Lehtikuva. Secretary General of the Organisation for Economic Cooperation and Development (OECD) Angel Gurria on Wednesday said Finland still had time to tackle the budget deficit and address its economic woes.
Speaking at the presentation ceremony of the latest Economic Survey of Finland, the OECD secretary general said the level of public debt was still at a sustainable level.
“Your debt is 60% of the GDP while other OECD members have an average of about 100%,” he observed.
He highlighted that the timetable for the budget readjustment can be made more flexible referring to the government plans to put its finances in order by hiking taxes and cutting expenditures.
Minister of Finance Jutta Urpilainen is speaking in the OECD report publication programme.Photo – Str / Lehtikuva. Gurria also warned of increased taxation on labour and investment suggesting that they should be restructured in a way so that more emphasis could be given on consumption and real estate taxation.
He also acknowledged that OECD and other economic organisations are not always right in their predictions. He pointed out that past few years’ forecasts were rosy.
Finance Minister Jutta Urpilainen has earlier said it would be wise to implement the budget readjustment of €3bn over a number of years instead of just one fiscal year.
News Agency Xinhua adds: A latest report issued by the OECD had urged Finland to make more efforts in the structural reform to stimulate the economy, Finnish Broadcasting Company YLE reported on Wednesday.
OECD called for measures for restructuring municipalities, raising retirement age and stricter mortgage rules, for bolstering economic growth and dealing with the ageing population.
OECD Secretary-General Angel Gurria and Minister of Finance Jutta Urpilainen at the publication ceremony of Economic Report on Finland. Photo – Str / Lehtikuva. The OECD report pointed out that the rising cost of acquiring pensions and healthcare for an ageing population is a threat to Finland. It suggested higher retirement age and ending part-time retirement to solve the problems.
The report noted that cutting down the number of municipalities and a shift towards property taxes would help ease the dependence of local governments on business taxes.
The Finnish government reached a structural reform scheme in August last year, aiming to tackle the “sustainability gap” in the state budget caused by the sluggish economic growth and expanding ageing population.
The reform measures included cutting local government spending, reducing family benefits, raising the effective retirement age and others.
Six months have passed since the structural reforms were carried out and no obvious improvement in economy is visible yet, said OECD.
As part of its banking reform bill, the Finnish government has recently proposed stricter mortgage regulations to restrain a potential housing bubble. The tabled measures will come into force after July 2016.
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