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Gov't looking at new austerity measures

The Finnish government is preparing to take decisions on new spending cuts and higher taxes. According to information received by Yle, the main government parties estimate that state finances require between 500 million and just under one billion euros in belt-tightening.

The estimate by the Social Democratic Party of needed spending cuts is between half a billion to just under a billion euros. The estimate by the National Coalition Party is closer to one billion.

However, both parties stress that a final figure cannot be set before the Finance Ministry publishes its next growth forecast.

Decisions on spending cuts and tax hikes will be made in government negotiations in March.

Five billion already trimmed

The government parties wrestled with the issue of state finances during cabinet formation talks. At that time, a 2.5 billion euro belt-tightening programme was agreed. A further 2.5 billion was added during draft budget talks last spring.