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Finance Minister Orpo predicts debt level drop

Finland's Minister of Finance Petteri Orpo says Finland's debt load will likely fall as the economy and employment opportunities continue to improve.

 Valtiovarainministeri Petteri Orpo ja SDP:n puheenjohtaja Antti Rinne eduskunnan täysistunnossa 7. joulukuuta
Minister Petteri Orpo (left) in the Finnish Parliament on December 7 Image: Vesa Moilanen / Lehtikuva

Finnish Finance Minister Petteri Orpo appeared on Yle's morning talk show on Saturday with a positive message: he says Finland's economic situation is looking up – even more, in fact, than his ministry had earlier predicted – and this means the state hasn't had to take on as much debt as it had anticipated.

Orpo says unemployment figures were worse one year ago, when this year's budget was being negotiated, than they are today. 

"Now the indicators look different. In the autumn it was still estimated that the [2017] debt forecast would be 4.5 billion euros. But we currently find ourselves in a situation in which the State Treasury has issued a three-billion-euro estimate for the sum required," the minister told the public broadcaster.

Orpo, who is also chair of Finland's conservative National Coalition Party, warns that it is still unclear whether the state really will reduce this year's projected indebtedness by 1.5 billion euros. This is because the final figures will only become clear at the end of 2018.

Even so, he considers the preliminary signs to this effect to be promising.

"It looks as if the drop in the necessary debt load will be quite significant. Next year's budget has been built on the idea of taking on three billion euros more in debt, but I believe that by supporting economic growth and more jobs, we could stand a chance to lower this," Orpo said.

Austerity still the name of the game

Despite the signs of an economic upswing, the Finance Minister nevertheless says it is wisest to stick with his centre-right government's strict cost-saving economic policies for the time being. He says this way Finland could get back on its feet well enough to potentially stop the need to take on more debt all together.

He justifies his cautious approach on his ministry's financial predictions for the country.

"We are currently experiencing over three percent growth figures. While a healthy growth level is expected to continue, it will fall to around two percent or so in the next two years," Orpo predicts.  

Orpo says that even this promising upturn isn't good news, if the state is still forced to increase its deficit in order to make ends meet.

"Each of us understands that if we are becoming more indebted even during economic upswings, the situation is not ideal," he said.

According to NationalDebtClocks.org, Finland's total national debt currently stands at 122.5 billion euros, equating to 22,400 euros per citizen.

For comparison's sake, Sweden's state debt is estimated at 189.3 billion euros, the UK's national debt has surpassed 2 trillion euros, and the US deficit has ballooned to the equivalent of over 17.4 trillion euros.

One exception: Early childhood education

During the Saturday interview, Orpo confirmed that he is willing to make some exceptions to his policy of tight purse strings. For example, he mentions that government has earmarked money to make half-day early childhood education more widely available to five-year-old children in Finland.

"We took the first step to reduce early education fees by 70 million euros. This would make it possible for close to 7,000 low-income families to partake in early education at no expense," he said.

"Those children who haven't been able to attend because of the cost are the ones that need it most," Orpo said, saying the funding is intended to help level the playing field for Finland's families.

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