Finland will not be punished for breaching EU rules on balanced budgets, despite a state debt that has grown to more than 60 percent of GDP. That is the level laid down in the EU’s Growth and Stability Pact as the upper limit for prudent budget.
Italy and Belgium also technically breached the rules but were found to be within the criteria, but Italy will be inspected again in November. Six countries remain in the mechanism: France, Spain, Great Britain, Croatia, Portugal and Greece.
According to the recommendations in the report, Finland should trim state spending by 0.5 percent of GDP this year and 0.6 percent next year. Finance Minister Alexander Stubb declared himself satisfied with the Commission’s work.
"We are doing everything to reform the public sector, so that we could avoid the Commission’s excessive deficit mechanism," said Stubb. "The good news is that we’ve avoided it, but the bad news is that we are still in the at-risk category."
The Commission did recommend the Finnish government press ahead with already-stated goals on social and health care reform and structural reform in the labour market.
Other recommendations include increased competition in the service sector, especially in retail, as well as measures to promote entrepreneurship by reducing bureaucracy and red tape.