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Wednesday, 25 May, 2022
Home BUSINESSFinland can ill afford further financial obligations
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Tue, 24 Mar, 2015 12:08:59 AM
FTimes – STT Report, Mar 24
Finance ministry Financial Counsellor Sami Yläoutinen presented the report at a press conference in Helsinki on Monday. Photo – Lehtikuva.
The country cannot afford to increase its financial obligations during the next parliamentary term, said the Ministry of Finance in a report published on Monday.
Financial risks and responsibilities have grown at a rapid rate at a time when the economic performance is staggering.
The state guarantees issued are increasing rapidly. Last year, the state guarantees amounted to 50 billion euros, while in 2005 it was around 15 billion euros.
In the public domain, most attention has been given to the Eurozone crisis; however, there has been a brisk growth in guarantees issued in domestic housing and corporate finance.
The report criticised the manner in which obligations were undertaken. According to the report, the risks were not evaluated sufficiently when decisions to increase the guarantees were being made, for instance, on the part of corporate financing.
“In our view, the decision making disregarded the risk point of view, not necessarily as a whole, but to a significant number,” said Financial Counsellor Sami Yläoutinen at a press conference.
The state guarantees in the country are high by international standards. According to Eurostats, Finland has the third highest state amount of guarantees in the European Union, when only domestic funding obligation is taken into consideration, but not as a result of the Euro crisis.
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