This weekend Prime Minister Sanna Marin (SDP) is holding bilateral talks with coalition partners to determine whether or not they want to stay in the government following days of clashes over next year's budget.
Finance Minister Matti Vanhanen (Cen) on Saturday told Yle’s Ykkösaamu chat show he agreed with the premier’s decision to extend talks on next year’s budget over the weekend.
He said it was important not to rush decisions reaching into the next two years.
Media outlets have reported that disagreements between the Centre Party and its left-wing coalition partners could lead to the collapse of the government.
"Not a model student"
Credit ratings agency Fitch on Friday affirmed Finland's creditworthiness at AA+. Vanhanen, however, said that Finland's easy access to money did not make it a model financial student.
"We’ve got high points [among EU states] for practising fiscal responsibility over the past 20 years. We want to keep this reputation," he said.
Vanhanen noted that while the world economy is set to grow by six percent this year as coronavirus restrictions ease, Finland’s state budget will remain in deficit.
The government is exceeding the budget framework it previously set itself by 800-900 million euros, according to information obtained by Yle.
The Centre Party has said it wants to introduce new measures to improve public finances, such as expanding local labour agreements and staggering income-related unemployment benefits.
Marin has put forward a compromise to balance the budget that includes adding 80,000 jobs to the labour market.
"It’s telling that we keep borrowing even though we’re in the middle of good economic growth. Old problems—the aging population and healthcare reform—haven’t disappeared during Covid," Vanhanen said.
Commenting on Stora Enso’s recent announcement to shutter its Veitsiluoto pulp and paper mill in Kemi, northern Finland, Vanhanen said demand for paper was dropping.
He noted that Finland had to adapt to changes in global demand for paper.
Vanhanen’s Centre Party has meanwhile said Finland was too expeditious in phasing out peat burning. Finland is set to meet its goal of halving the use of peat as an energy source in 2022, eight years ahead of schedule, following measures such as raising the energy tax on peat.
Vanhanen told Yle he believed peat has a role in securing Finland’s energy supply. He noted that entrepreneurs in the peat sector offer Finland an alternative energy source to imported oil.
Government talks on a framework for next year's state budget are scheduled to resume on Sunday morning.