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Budget talks focus on pandemic recovery, unemployment

PM Sanna Marin's cabinet is expected to unveil plans for improving employment in budget talks next week.

Pääministeri Sanna Marin. 31.3.2021.
Premier Sanna Marin speaking to the media at the House of Estates in Helsinki on 31 March. Image: Jorge Gonzalez / Yle

Government partners are meeting next week to set out a path for the pandemic-bruised economy during the cabinet's final two years in office. Prime Minister Sanna Marin’s government is expected to unveil plans for improving employment and balancing public finances.

The cabinet has said it wants to turn around public debt growth by the end of the decade. Government parties do not, however, agree on how to reach that goal.

Left-leaning parties have emphasised that introducing spending cuts too early could endanger early signs of growth.

In 2022, the government is scheduled to return to a normal budgetary framework—the spending level outlined at the beginning of the electoral term. This will likely entail some spending earmarked for 2022 or 2023 to be pulled in. The government must also figure out how to cover a 300-million-euro shortfall in NGO funding from state gambling monopoly Veikkaus and pay for costs related to healthcare reform Sote.

Last year Veikkaus announced that it would trim more than 3,000 slot machines from its network after public criticism of addictive games and questionable marketing campaigns. That decision led to major revenue losses.

Employment matters

Most government parties have said they believe it’s possible to add some 20,000-30,000 people to the workforce. At the end of last year the government said it had not abandoned its goal of reaching a 75-percent employment rate by the year 2023, which would entail adding 60,000 jobs to the labour force.

Unemployment is an other stubborn problem the government is facing. It has not been easy for coalition partners to find common ground on how to revamp income-related unemployment benefits.

The Centre Party and Finance Ministry want to adjust income-related benefits to correspond with career length. The Green Party and Swedish People’s Party are also in favour of rolling back income-related jobless benefits. The Social Democrats have meanwhile said they’re willing to look at the different options for staggering benefits as long as changes are made fairly and without major cuts.

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