Pekkarinen Calls for More Stimulus
Minister of Economic Affairs Mauri Pekkarinen wants the government to enact more stimulus to spur economic recovery.
Image: YLE
Minister of Economic Affairs Mauri Pekkarinen calls for more economic stimulus to make sure that the Finnish economy will recover at the same pace as that of the rest of the European Union. Pekkarinen would finance the stimulus by borrowing and raising taxes.
The economy of the rest of the euro zone appears to be recovering well before that of Finland, Pekkarinen warns. He is afraid that the European Central Bank will raise interest rates too early from Finland’s point of view, which would accelerate the recession in Finland.
Pekkarinen says that stronger stimulus measures would help avert an interest rate trap and improve employment. In addition to borrowing money, Pekkarinen would increase taxes on the richest Finns and consumption which causes pollution.
“Stimulus One of Few Options”
“The recession is not over in Finland, and in many sectors the biggest problems are still ahead,” Pekkarinen warns. He says that the Finnish economy depends on sectors that generally start to recover after the world economy starts improving.
The recession in Europe has most severely affected fields which are important for Finland, and the exchange rate of the euro is too high from Finland’s point of view, Pekkarinen says. He notes that stimulus is one of the few options that Finland has to turn its economy upward in synch with the rest of the EU and avert an interest rate trap.
YLE