Finland Times

 

Finance Minister Jutta Urpilainen. Photo - AFP / Lehtikuva.

Finance Minister Jutta Urpilainen on Friday said the criticism made by the European Union Commission in its meeting – regarding the debt situation in Finland’s economy – would not increase pressure directly on the ongoing economic efforts of the government.

 

The EC – in its Thursday’s meeting of the finance ministers of the member states on the budget of member countries – criticised the economic situation of Finland caused by a huge debt.

 

“I do not feel that the observation will put more pressure on the government effort to overcome the economic crisis,” said the finance minister on her arrival, adding that it might be important and significant in strengthening the government’s economic policies.

 

The minister said she at least in principle considered the observation as useful, although the EC’s role for not bringing any correction to the budget of any member state was also criticised.

 

“Yes, this openness, transparency and joint evaluation will certainly increase understanding and may lead structural reforms in other countries,” said Urpilainen, the chief of the Suomen Sosialidemokraattinen Puolue (Social Democratic Party-SDP), the second biggest component of the six-party alliance government.

 

Earlier in late June, analysts feared that the country’s excellent credit rating may deteriorate sharply after a couple of years because of the downward economical trend and gradually increasing public debt.

 

Photo - AFP / Lehtikuva.

The economic researchers said the present AAA credit limit of Finland would not fall immediately but it might face a dangerous situation gradually after 2015.

 

“The public debt should not cross the 60 percent of the gross domestic product but Finland´s debt will cross the limit of  60 percent in 2015,” said business researcher Markku Kotilainen, adding that the bank loan of the country would increase to 62 percent of the gross domestic product.

 

Markku Kotilainen said the increase of the credit limit would affect the credit rating seriously.

 

The researcher warned that the decrease of credit limit would increase the interest rate and crossing the limit of 60 percent of GDP would prompt the European Union to bring Finland under inspection.

 

“In that case EU would give instructions to Finland,” said Kotilainen, adding that failure to follow the instruction would result in sanctions for Finland.