Finland Times

 

The ruling parties leaders met at the Prime Minister official residence on Saturday night. Photo – Lehtikuva.

The components of the six-party alliance government started discussion at the Prime Minister's official residence, Kesäranta on Saturday to pave way for the spending limits during the ongoing economic crisis.

 

Leaders of all the six parties were present during the meeting, which will be continued on Sunday to finalise their policy for the talks scheduled for Monday and Tuesday, ruling parties sources said.

 

The spending limit session is to decide on massive savings, debt management, state fiscal adjustment and structural reforms.

 

The government is to deliberate on 3-4 billion fiscal adjustment during the talks.

 

Earlier on February 25, the government also held talks with the opposition parties, although the political dialogue between the ruling and opposition parties failed to reach any understanding on the government’s austerity plans for tackling economic crisis.

 

The parties from both tents felt that austerity was necessary to overcome the situation, but they failed to agree on the period of implementation.

 

Leaders of the opposition parties said they would leave the decision on fiscal adjustment to the government.

 

File picture of Prime Minister Jyrki Katainen and Minister of Finance Jutta Urpilainen at meeting on spending limit with the opposition parties on February 25. Photo – Lehtikuva.

Meanwhile, the decision regarding the fiscal adjustment is not even clear within the government itself. 

 

Jutta Urpilainen, the Finance Minister and the party leader of Suomen Sosialidemokraattinen Puolue (Social Democratic Party of Finland), the second biggest component of the government has not yet taken any stance on whether the fiscal adjustment should be carried during this government's term.

 

Earlier on February 15, former prime minister Matti Vanhanen urged the government to speed up the process of making a decision on spending cuts and saving money.

 

Vanhanen, presently the executive director of Finnish Firms Family Association, in an interview with Yle Television said the greater proportion of the planned savings should be done during the tenure of the present government.

 

“Yes, we have to make the savings here and now. I mean the 3 billion [euros] during this government’s term,” said Vanhanen.

 

Angel Gurria, secretary general of the Organisation for Economic Cooperation (OECD), in a presentation on the latest Economic Survey of Finland on February 12 in Helsinki, said Finland still had time to tackle the budget deficit and address the economic woes.

 

This was followed by an assessment by the fiscal policy expert group which observed that adjustment measures can be phased over three years.

 

The Finance Minister earlier also admitted that the issue of leaving the fiscal adjustment decision on the next government was not that simple.

 

Jouni Backman, the head of SDP parliamentary group earlier said in an interview with Finnish language online newspaper Verkkouutiset, said that the social democrats do not support the idea of leaving the next government to make concrete decisions on the budget adjustment and prefers sequencing of the adjustments.