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Tue, 25 Aug, 2015 12:03:30 AM FTimes Report, Aug 25  Finance Minister Alexander Stubb, Prime Minister Juha Sipilä and Minister of Foreign Affairs Timo Soini at a press conference in Helsinki on Monday.Photo – Lehtikuva. Prime Minister Juha Sipilä on Monday presented the government’s plans to tackle the estimated sustainability gap of about euro 10 billion in the coming years, said an official press release.
The announcement came after the failure to reach to a social agreement with the labour market organisations on August 20.
According to the Prime Minister, bridging the sustainability gap of 10 billion euros requires savings of four billion and structural reforms amounting to about four billion.
The rest of the gap should be covered through better competitiveness, achieved by renewing the working life, moderate wage demands and measures to increase productivity.
Sipilä maintains that the social contract would have been greatly needed in search for economic growth.
Now that the negotiations on the contract failed, the government must find other ways to proceed.
“Getting economic growth started is the first priority. The better we succeed in renewing the working life, moderate wage demands and higher efficiency, the less additional cuts in government expenditure and tax increases will be needed,” said the Prime Minister.
Sipilä will bring the government’s plan to improve competitiveness to the Parliament as a government statement by the end of September 2015.
The aim is that the necessary legislation would be adopted in June 2016 at the latest.
“Our economic position is so serious that there is no time to lose. However, the opportunities for Finland to overcome the great challenges are still there. Whether we succeed or not is in our own hands”, Sipilä added.
News agency STT adds: “The package includes changes to working life which are in the government programme and now the envisaged new measures,” Sipilä said in press conference on Monday evening.
According to Finance Minister Alexander Stubb, the new reform package is not about cuts.
“They are not austerity measures, rather they are measures in which we can get the demand and supply of workforce to increase in this country and through them economic growth,” Stubb said at the press conference.
The only concrete measure which the premier mentioned during the conference was the use of the so called EMU-buffers to reduce payroll tax.
The EMU-buffer is collected in two buffer funds created in the occupational pension scheme and the unemployment insurance system.
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