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Government boosts defence spending in new budget deal

Concerns about the Ukraine war heavily influenced this year's budget framework discussions.

Sanna Marin lehdistötilaisuudessa.
Prime Minister Sanna Marin (SDP) said that the war in Ukraine was one reason for stress on the state budget. Image: Petteri Sopanen / Yle
Yle News

Finland's government has concluded negotiations on the country's budget framework ahead of schedule. On Tuesday, ministers hammered out a three-year spending plan that starts in 2023.

The negotiations were originally scheduled to last for two days, with last spring's session stretching to nine days.

Speaking to the media on Tuesday, Finance Minister Annikka Saarikko (Cen) said the primary goals of this year's budget framework negotiations were to achieve three kinds of sustainability: that of society, nature and the economy.

The current budget proposal includes a 370-million-euro reduction in expenditure. The largest cuts in spending will be made for projects in the transport sector.

Impact of Ukraine war

Ahead of the negotiations, Prime Minister Sanna Marin (SDP) said that the war in Ukraine was adding significant upward pressure on the state budget.

According to Saarikko, while the effects of the Covid-19 crisis on Finland's economy were temporary, the impact of the Ukraine war is not. Due to Russia's invasion of Ukraine, this year's state budget includes arrangements for emergency expenses in case of an attack.

Minister of Justice Anna-Maja Henriksson (Swe) also said that the government has set aside around 780 million euros for Ukrainian refugees.

Additionally, the state will retroactively reimburse municipalities for costs incurred due to refugees.

More money for defence, border security

The prime minister said the government had decided to increase funding for defence as well as border and cyber security.

The government will add an additional 200 million euros in defence spending in the spring supplementary budget.

According to Saarikko, Finland's defence forces will be given an additional 130-200 million euros for military operations in the coming years.

The government has allocated a total of two billion euros for investments in defence for the next four years, of which 1,740 million euros has been slotted to procure military materials.

Around 160 million euros has been set aside to purchase surveillance aircraft for border security.

The government also plans to increase investments in science and research, with a special focus on increasing Finland's energy self-sufficiency and speeding up the transition to green energy.

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