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Finance minister at odds with PM Marin's green transition spending proposal

The Prime Minister said last week that Finland should re-think attitudes towards debt, especially in terms of funding a so-called 'green transition' to fight climate change.

Annika Saarikko ja Sanna Marin.
Finance Minister Annika Saarikko of the Centre Party and Prime Minister Sanna Marin of the Social Democratic Party speaking to the media last April. Image: Benjamin Suomela / Yle
Yle News

Minister of Finance Annika Saarikko (Cen) told Yle that she is not in favour of making changes to Finland's framework on public sector borrowing, for example in order to finance climate investments that could lead to the state taking on more debt.

Last week, Prime Minister Sanna Marin (SDP) said she wanted to re-think the country's attitude towards debt, especially in terms of funding a so-called 'green transition' to fight climate change.

However, in an interview with Yle on Wednesday, Saarikko said it would be difficult to determine the necessary investments. In practice, she added, each party could propose to move a wide range of costs and investments outside of the framework, which in turn would increase spending and add to the country's debt.

Traditionally in Finland, each government has set a spending limit at the start of its four-year term in office, but the current government has had to breach its own limits due to the coronavirus crisis.

"It would be a slippery slope that could lead to broader definitions of what exactly green debt means," Saarikko said, citing as an example the funding of efforts to tackle the marginalisation of young people could also be justified as an investment in the future, outside of the agreed framework.

"Could we trust each other that there would be no temptation to define new projects as investments," she asked.

Speaking at a climate debate organised by Helsingin Sanomat last week, PM Marin suggested that investment in projects aimed at tackling climate change could be excluded from the framework procedure.

"I would be careful not to break Finland's own framework system. Even if the expenditure were outside the framework, it would require taking on debt," Saarikko said, adding that shifting expenditure outside of the framework would lead to a "hole" in the system, or a leak in the framework and therefore a need to take on additional debt.

"I am not particularly enthusiastic about the idea of making my own framework system full of holes," the minister added.

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